This is financial markets and "race of return" chapter 16 for microeconomics

10 do 4/ 13 Microeconomics Homework # 7 The time value of money 1 . I've invested $20,000 in a ten-year certificate paying 8% interest, compounding annually until the end of the tern year period. What is the value of the certificate at maturity? 2. How much money would I have to put in a ten-year certificate paying 8% (compounding annually), in order to redeem that certificate for $10,000 ten years from now? 3 . If I put $10,000 in an 8% certificate (compounding annually), how long until the value of the certificate reaches $20,000? 4. I've put $10,000 in a certificate today, and it is worth $20,000 in 15 years. What was the interest rate (compounded annually)? 5. I've spent $10,000 to install high efficiency windows in my home. They are expected to last 20 years. I expect my annual heating bill to decrease by $1,000. a. What is the "net present value of my investment? Use a discount rate that is appropriate for YOU as an individual? b. If city hall had made this investment, what is the "payback" time? Use a discount rate appropriate for a public project. C . Calculate the "Internal Rate of Return" for this project. Would a profit maximizing company be willing to invest in this project at their corporate offices