The following question covers time value of money.

a. You inherit $214,000 today. Rather than spending it, you decide to invest it. If you earn 6% per year (compounded annually), how much money will you have in 36 years? Round to the nearest cent.

b. You are planning to lend $7,000 to someone you know. If you charge him an annual interest rate of 3.7% compounded monthly, how much will he owe you in 4 years? Round to the nearest cent.

c. Someone you know needs a loan and she is willing to pay you back $16,000 in exactly 8 years. If the appropriate discount rate is 4.7% compounded annually, how much would you be willing to loan her today? Round to the nearest cent.

d. You have $56,000 in an account which pays 2.4% compounded annually. How many additional dollars of interest would you earn over 7 years if you moved the money to an account earning 3.7% compounded quarterly? Round to the nearest cent. [Hint: In one scenario, you are looking for the FV of a single cash flow with annual compounding. In the other scenario, you are looking for the FV of the same single cash flow with non-annual compounding. This question is asking for the difference between the two future values.]