1. Compute the present value for each of the following situations, assuming an interest rate of 10% compounded annually. (Round amounts to the nearest dollar.)

a. A single payment of $30,000 due on a mortgage five years from now.

b. A series of payments of $5,000 each, due at the end of each year for five years.

c. A five-year, 10% loan of $25,000, with interest payable annually, and the principal due in five years. 2. Compute the future value amounts (rounded to the nearest dollar) in each of the following situations:

a. A $20,000 lump-sum investment today that will earn interest at 10% compounded annually over five years.

b. A $5,000 lump-sum investment today that will earn interest at 8%, compounded quarterly to provide money for a child’s college education 15 years from now.