Answer the questions using Excel, a financial calculator, or the textbook Tables. For each problem, identify N, I/YR or R, PV, FV, and PMT.

1. Present and future values for different periods. Find the following values using a financial calculator or Excel. The compounding and discounting rates occur annually. a. An initial $500 compounded for 1 year at 6 percent b. An initial $500 compounded for 2 years at 6 percent c. The present value of $500 due in 1 year at a discount rate of 6 percent d. The present value of $500 due in 2 years at a discount rate of 6 percent

2. Present and future values for different interest rates. Find the following values compounding/discounting occurs annually. a. Determine the future value of an initial $500 deposit compounded for 10 years at 6 percent. b. Determine the future value of an initial $500 deposit compounded for 10 years at 12 percent. c. Determine the present value of $500 due in 10 years at 6 percent. d. Determine the present value of $1,552.90 due in 10 years at: i. 12 percent and ii. 6 percent.

3. Determine the future and the present value of an ordinary annuity at: a. $400 per year for 10 years at 10 percent b. $200 per year for 5 years at 5 percent

4. Future value of an ordinary annuity. Your client is 40 years old, and she wants to begin saving for retirement, with the first payment to come one year from now. She can save $5,000 per year, and you advise her to invest it in the stock market, which you expect to provide an average return of 9 percent in the future. a. If she follows your advice, how much money would she have at 65? b. How much would she have a 70? c. If she expects to live for 20 years in retirement when she retires at 65 or 15 years at 70, and her investments continue to earn the same rate, how much could she withdraw at the end of each year after retirement at each retirement age?