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Q1: For each of the following: Compute the Future value (FV) Present Value Years Interest rate Future Value $ 3,159 84,53 89,305 T 16 19

Q1: For each of the following:

Compute the Future value (FV)

Present Value

Years

Interest rate

Future Value

$ 3,159

84,53

89,305

T

16

19

26

13%

Y

9

5

Compute Present Value

15

8

13

25

7%

11

10

13

$ 17,328

41,517

7903,82

647,816

Compute the interest rate

Present Value

Years

Interest rate

Future Value

$ 715

905

15,000

70,300

11

8

23

16

$ 1,381

1,718

141,832

312,815

Q2: Compute the Future value of $ 1,000 continuously c compounded 12 percent for:

5 years at a stated annual interest rate of

12 percent;

3 years at a stated annual interest rate of 10 percent.

10 years at a stated annual interest rate of 5 percent;

and

8 years at stated annual interest rate of 7 percent

Q3: Consider a firm with a contract to sell an asset for $ 115,000 three years from now, the asset costs $ 72,000 to produce today. Given a relevant discount rate on this asset is 13 percent per year. Will firm make a profit on this asset? At what interest rate does the firm just break even?

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