Use equations and a financial calculator to find the following values. See the hint for Problem 2-1.

a. An initial $500 compounded for 10 years at 6 percent.

b. An initial $500 compounded for 10 years at 12 percent.

c. The present value of $500 due in 10 years at a 6 percent discount rate.

d. The present value of $1,552.90 due in 10 years at a 12 percent discount rate and at a 6 percent rate. Give a verbal definition of the term present value, and illustrate it using a time line with data from this problem. As a part of your answer, explain why present values are dependent upon interest rates.