Suppose that an investment offers a rate of return of 7% per year, compounded monthly. Which of the following formulas will correctly calculate the future value if you invest $20,000 for 10 years? A B 1234 ST9 5 6 7 8 10 11 12 Present Value Years Interest Rate Compounding Frequency Future Value O=FV(C4/C5,C3/C5,-C2) O=FV(C4 C5,C3C5,0,-C2) OFV(C3/C5,C4 C5,0,-C2) O=FV(C4/C5,C3 C5,0,-C2) 20,000.00 10 7% 2 ? What is the value in cell B8? 123 2 3 4 5 6 A Year 81234 0 7 Rate 8 Decision 9 B Cash Flow (6,500) 2,500 3,000 1,000 4,000 11% O "Reject" O "Accept" O "None of the above" D E =IF(NPV(B7,B3:B6)>=-B2,"Accept","Reject") F What is the value of B8? A Bond Valuation 1 2 Time to Maturity (Periods) 3 Coupon Rate 4 Required Return 5 Frequency 6 Face Value 7 8 Quoted Price 9 10 O $1,000.00 O $743.61 O $731.95 O $870.14 $ B 17 2/3 7.00% 12.00% 2 1,000 ? C