A B C D E F G H J K 1 2 3 4 5 1. You have an investment opportunity that promises to pay you $20,000 at a future date. You can earn 5% compounded semiannually on similar investments. How much would you be willing to invest assuming you will receive the amount at the end of (a) three years, (b) four years, or (c) five years? 10 6 Formulas should include the =FV function and return a POSITIVE value. 7 Future value Additional amount received at the end of each semiannual period Interest rate Compounded semiannually 00 8 9 10 11 12 13 14 15 16 5698 17 Investment Term Present Value 3 Years 4 Years 5 Years $20,000 $0 5% 2 Compounding periods per year 2. If, in addition to the $20,000 future value, you receive an additional $1,000 at the end of each semiannual 18 period, how much would you be willing to invest assuming the investment spans (a) three years, (b) four years, or 19 (c), five years? 20 Formulas should include the =FV function and return a POSITIVE value. Additional amount received at the end of each semiannual period $1,000 21 22 23 24 25 26 27 28 29 Investment Term 3 Years 4 Years 5 Years Present Value