1)Compute the future value of $1,000 compounded annually for the following. (a) 10 years at 5 percent. m = 1. (b) 10 years at 5 percent. m = 2. (c) 10 years at 5 percent. m= 12. (d) Describe the relationship between m and FV

2)Calculate the present value (i.e., today's value) of the following cash flows discounted at 10 percent: (a) $1,000 received seven years from today. m = 1. (b) $1,000 received seven years from today. m = 2. (c) $1,000 received seven years from today. m = 12.

3) (a) One year ago, you invested $3,000. Today it is worth $3,142.50. What rate of interest did you earn? (b) Forty years ago, your father invested $2,500. Today that investment is worth $107,921. What is the average rate of return your father earned on his investment? (c) A $10,000 investment in Merck stock on January 1, 2008 would have grown to $54,984 by December 31, 2017. What was the compound annual return on Merck over that 10-year period?

4) (a) What interest rate will allow you to triple your invested money in five years, with m = 1? (b) Redo part (a), but with m = 2.

5) Would you rather receive $1,000 today or $2,000 in 10 years if the discount rate is 10 percent? This question shows the equality between using the FV and PV equation