1. Calculate Present Value - Question:You just won a prize and will receive $1,600 two years from today. What is this prize worth to you today at a discount rate of 8.50 percent?

   $1,344.56

   $1,294.77

   $1,359.13

   $1,313.83

25 points

QUESTION 3

1. Calculate the required rate of return - Question:Today, you invested $4,100 in a retirement account. What annual rate of return will you have to earn if your account is to be worth $56,000 when you retire 35 years from now? Assume you make no further deposits into this account.

   7.76 percent

   8.10 percent

   8.17 percent

   8.23 percent

25 points

QUESTION 4

1. Calculate the periods (time) of investment - Question:Smith Industries currently has $292,000 saved towards the purchase of a new $328,000 machine. How long does the firm need to wait to purchase this machine for cash if the firm does not save any more money and earns 6.00 percent on its savings?

   2.26 years

   2.25 years

   2.00 years

   2.12 years