The principal of the time value of money is probably the single most important concept in financlal management. One of the most frequently encountered appilications involves the calculation of a future value. The process for corverting present values into future values is called This process requires knowledge of the values of three of four time-value-of-money varlables. Which of the following is not one of these varlables? The duration of the Investment ( N) The Interest rate (I) that could be earned by invested funds The Inflation rate indicating the change in average prices The present value (PV) of the amount invested All other things being equal, the numerical difference between a present and a future value corresponds to the amount of interest earned during the deposit or Investment period. Each line on the following graph corresponds to an interest rate: 0%,10%, or 20%. Identify the Interest rate that corresponds with each line. Line A: - Line B: Investments and loans base their interest calculations on one of two possible methods: the Interest and the . Interest methods. Both methods apply three varlables-the amount of principal, the Interest rate, and the investment or deposit period-to the amount deposited or invested in order to compute the amount of interest. However, the two methods differ in their relationship between the varlables. Assume that the varlables I, N, and PV represent the interest rate, investment or deposit period, and present value of the amount deposited or Invested, respectively. Which equation best represents the calculation of a future value (FV) using: Compound interest? FV=PV/(1+1)NFV=PV+(PVIN)FV=PV(1+1)N Simple Interest? FV=PV+(PVIN)FV=PVINFV=PV/(PVIN) Identify whether the following statements about the simple and compound interest methods are true or false. Yurl is willing to Invest $30,000 for 51X years, and is an economically rational investor. He has identifled three investment alternatives ( X, Y, and Z ) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the slx-year Investment period, complete the following table and indicate whether Yurl should invest in each of the investments. Note: When calculating each investment's future value, assume that all Interest is eamed annually. The final value should be rounded to the nearest whole dollar