This is a graded discussion: 10 points possible 10.14 Time Value of Money! Discussion Ae Od 11 Why is the present value of $100 that you expect to receive one year from today worth less than $100 received today? What is the present value of $100 that you expect to receive one year from today, discounted at 6%? (you don't need to use a table for this question). (5 points) Present value of a lump sum amount: PV-1/(1-1) P stands for principal or amount n stands for time period Let's look at the flip side now. How much money will you have in 20 years if you invest $1.200 at the end of EVERY YEAR (annuity) at 7% rate of return (say in a mutual fund account)? You can use the table below (use the future value of an annuity table since this investment is happening periodically and not only one time), a financial calculator, or an excel spreadsheet to calculate the future value of this annuity. Again, use the 3rd tab in the attached spreadsheet Future Value of an Annuity (10 points) You don't have to respond to another student's post in this discussion but you are encouraged to do so, I chose this exercise because I want to encourage you to save at an early age (or invest early). I will discuss this topic more during our last meeting This discussion is worth 15 points and is due on Sunday, October 9. by 11:59 PM Pacific Time. The section below is not required for the work. Question: Do you know how much you can accumulate in 20 years if you invest $100 per month (instead of one $1,200 lump sum amount at the end of the year) at 7%? always remember that invested amounts are not FDIC insured. There is a risk of losing your investment but there are some mutual funds that have had excellent performance for over 50 years. You need to do your research. Answer: $52,092.67 (total return of $28,092.67; more than double what you invested; don't forget this: risk versus return)