Question 1

What is the FV at the end of year 6 of $2,461 put in an account today if the return is 9.4% per year?Answer to 2 decimal points.

Question 2

Your firm is concerned about a financial obligation of $19 million coming due in 6 years. If your firm could earn 6.5% APR on an investment, how much would your firm have to invest today to fund (finance) the future $19 million obligation?(In other words, what is the PV of $19 M due 6 years from now if the interest rate is 6.5%?)Assume annual compounding.Answer in units of millions of dollars and to 2 decimal points. (eg. $19.12 )

Question 3

What is the present value of a $1000 future amount received in 20 years if the appropriate discount rate is 10.7% APR? (FYI: This problem computes the value of a 20 year, $1000 zero coupon bond, although it is phrased in time value of money language, rather than bond language.)Answer to 2 decimal points.

Question 4

As interest rates increase, the PV of an expected future cash flow?

Does not change

Increases

Decreases