FIN 5263 Chapter 3: Future & Present Value Columbia Bank & Trust has just given you a $20,000 term loan to pay for a new concrete mixer. The loan requires payment of principal and interest at the end of the 5 years. If the loan provides the bank with a 12 percent return compounded annually, what will be your total loan payoff? What would your payoff be if the loan is compounded monthly 1. 2. Designs Now is opening a showcase office to display and sell it's computer designed poster art. Designs expect cash flows to be $120,000 in the first year, S180,000 in the second year, $240,000 in the third year. If Designs uses 11 percent as its discount rate, what is the present value of the cash flows? What would the future value be? 3. You are offered an investment which pays you $2000 a year for 10 years starting two years from now. If you require a rate of return of 7.5%, what is the present value of this investment