Calculation Questions- Please show the steps, specify the number you assign to different variables on the financial calculator then list the answer.

1. Problem 9.1- a, b, c.

• What is an opportunity cost rate?

• How is this rate used in time value analysis?

• Is this rate a single number that is used in all situations?

Find the following values for a lump sum assuming annual compounding:

9.1a The future value of $600 invested at 9.6% for one year. (Note the change in number)

9.1b The future value of $600 invested at 9.6% for five years (note the change in number)

9.1c The present value of $600 to be received in one year when the opportunity cost rate is 9.6% (note the change in number)

9.1d The present value of $600 to be received in five years when the opportunity cost rate is 9.6% (note the change in number)

2. Problem 9.3. Great lakes Health Network's net income increased from $3.2 million in 2005 to $6.4 million in 2015. The total growth rate over the ten years is 100 percent, while the annual growth rate is only about 7.2 percent, which is much less than 100 percent divided by ten years.

• What is the effective annual rate if the stated rate is 9.6% and compounding occurs semiannually (10%)? quarterly? (10%) (note the change in number) please show the formula and steps.

• Why is the annual growth rate less than the total growth rate divided by ten?

• Which growth rate has more meaning- the total rate over ten years or the annualized rate?