The principal of the time value of money is probably the single most important concept in financial management. One of the most fresuently encountered applications involves the calculation of a future value. The process for converting present values into future values is called This process requires knowiedge of the values of three of four time-value-of-money variables. Which of the following is not one of these variables? The present value (BV) of the amount deposited The trend between the present and future values of an investment The duration of the deposit (N) The interest rate (I) that could be earned by deposited funds 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 of investrment period. Each line on the following graph corresponds to an interest rate: 0%, 9%, or 18%. Identify the interest rate that corresponds with each line. All other things being equal, the numerical difference between a present and a future value corresponds to the amount of interest earned during the epost or investment period, Each line on the following graph corresponds to an interest rate: 0%,9%, or 18%. Identify the interest rate that corresponds with each line. Line A: Line Bi Line C:= Investments and loans base their interest calculations on one of two possible methods: the interest and the imertst methock. Both methods apply three variables - the amoont of princpal, the interest rate, and the irvestment or deposit peried-to the amount depasiled or invested in order to conpute the amount of interest. However, the twa methods differ in their relatienchip between the variables. Assume that the variables 1,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(1+1)NFV=(1+1)N/PN Simple interest? FV=PV+(PV1N)FV=PV=(PV1N)PV=PN/(PV1N) Identify whether the following statements about the simple and compound interest methods are true or false. Statement After the end of the second year and all other factors remsining equal, a future value based on compound interest will exceed a future value based on simple interest. AM other factors being equal, both the simple interest and the compound interest methods will not generate the amount of eamed interest by the end of the first year. The process of earning cempound interest allows a depositor or investor to earn interest on any interest eamed in prior periods. Identify whether the following statements about the simple and compound interest methods are true or false. Statement After the end of the second year and all other factors remaining equal, a future value based on compound interest will exceed a future value based on simple interest. All other factors being equal, both the simple interest and the compound interest methods will not generate the amount of earned interest by the end of the first year. The process of earning compound interest allows a depositor or investor to eam interest on any interest earned in prior periods. Nicholai is willing to invest $30,000 for three years, and is an economicaliy rational investor. He has identified three investment alternatives (A, B, and C) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the threeyear investment period, complete the foliowing tabie and indicate whether Nicholal should invest in each of the investments. Note: When calculating each investment's future value, assume that all interest is earned annually. The final value shouid be rounded to the nearest. whole dollar. The principal of the time value of money is probably the single most important concept in financial management. One of the most fresuently encountered applications involves the calculation of a future value. The process for converting present values into future values is called This process requires knowiedge of the values of three of four time-value-of-money variables. Which of the following is not one of these variables? The present value (BV) of the amount deposited The trend between the present and future values of an investment The duration of the deposit (N) The interest rate (I) that could be earned by deposited funds 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 of investrment period. Each line on the following graph corresponds to an interest rate: 0%, 9%, or 18%. Identify the interest rate that corresponds with each line. All other things being equal, the numerical difference between a present and a future value corresponds to the amount of interest earned during the epost or investment period, Each line on the following graph corresponds to an interest rate: 0%,9%, or 18%. Identify the interest rate that corresponds with each line. Line A: Line Bi Line C:= Investments and loans base their interest calculations on one of two possible methods: the interest and the imertst methock. Both methods apply three variables - the amoont of princpal, the interest rate, and the irvestment or deposit peried-to the amount depasiled or invested in order to conpute the amount of interest. However, the twa methods differ in their relatienchip between the variables. Assume that the variables 1,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(1+1)NFV=(1+1)N/PN Simple interest? FV=PV+(PV1N)FV=PV=(PV1N)PV=PN/(PV1N) Identify whether the following statements about the simple and compound interest methods are true or false. Statement After the end of the second year and all other factors remsining equal, a future value based on compound interest will exceed a future value based on simple interest. AM other factors being equal, both the simple interest and the compound interest methods will not generate the amount of eamed interest by the end of the first year. The process of earning cempound interest allows a depositor or investor to earn interest on any interest eamed in prior periods. Identify whether the following statements about the simple and compound interest methods are true or false. Statement After the end of the second year and all other factors remaining equal, a future value based on compound interest will exceed a future value based on simple interest. All other factors being equal, both the simple interest and the compound interest methods will not generate the amount of earned interest by the end of the first year. The process of earning compound interest allows a depositor or investor to eam interest on any interest earned in prior periods. Nicholai is willing to invest $30,000 for three years, and is an economicaliy rational investor. He has identified three investment alternatives (A, B, and C) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the threeyear investment period, complete the foliowing tabie and indicate whether Nicholal should invest in each of the investments. Note: When calculating each investment's future value, assume that all interest is earned annually. The final value shouid be rounded to the nearest. whole dollar