1. Determine the present value in each of the following situations.

a. A $\$ 5,000$ loan to be repaid in full at the end of three years. Interest on the loan is payable quarterly. The interest rate is 12 percent compounded quarterly.

b. A 2 -year note for $\$ 8,000$ bearing interest at an annual rate of 10 percent, compounded semiannually. Interest is payable semiannually.

c. A 5 -year mortgage to be paid in monthly installments of $\$ 1,000$. The interest rate is 12 percent compounded monthly.

2. Determine the future value in each of the following situations:

a. An investment of $\$ 10,000$ today to eam interest at $6 \%$ compounded semiannually to provide for a down payment on a house five years from now.

b. An investment of $\$ 25,000$ today to earn interest at $8 \%$ compounded quarterly that is designated for a charitable contribution 10 years from now when the donor retires.