Topic 1: Exercise on future value: 1) Suppose you deposit $ 10,000 today into an account that pays interest rate 6%/year. How much will you have in the next 5 years? 2) The amount of $1000 invested in five years with an interest rate of 12%/year, calculate the total amount received after 5 years, if interest is compounded annually, if interest is compounded monthly 3) Interest on interest: Suppose you invest for 2 years with an interest rate of 14%/year. If you invest $325 today, calculate the total amount and the total compound interest you will receive at the end of year 2 if the amount is compound interest? Calculate the total simple interest you receive at the end of year 2? Finally, how much profit should you calculate from interest? 4) Compound interests. You have a $400 investment that pays 12% interest. How much will you have in 3 years? in the next 7 years? At the end of the 7th year, calculate the total amount, total compound interest, total simple interest and the interest you receive if the amount is compound interest? 5. Dividend growth: TICO Corporation is currently paying cash dividends of 5 USD per share. You believe that dividends will grow at 4% per year forever. Calculate the total amount of dividends paid over eight years? 6. Calculating Future Values Assume you deposit $10,000 today in an account that pays 6 percent interest. How much will you have in five years?