Problem 1 Find the following values for a lump sum:

- The future value of $500 invested at 8 percent for one year

- The future value of $500 invested at 8 percent for five years

- The present value of $500 to be received in one year when the opportunity cost rate is 8 percent

- The present value of $500 to be received in five years when the opportunity cost rate is 8 percent assuming:

a. Annual compounding

b. Semiannual compounding

c. Quarterly compounding

Problem 2 What is the effective annual rate (EAR) if the stated rate is 8 percent and compounding occurs semiannually? Quarterly?