For Questions 3-6, please write/type out the equation and solve it using either a calculator or Google Sheets/Excel. You can also use the Excel/Google Sheets built-in formulas (FV, PV, RATE, and NPER) to check your answers - but don't rely exclusively on the built-in formulas. You may draw timelines for these questions but it is not mandatory.

1. Why are dollars we get today worth more than dollars we get in the future? [5]

2. How does the concept of an exchange rate relate to how we equate dollars from today with dollars from the future? What are the "exchange rates" that get us from present dollars to future dollars and future dollars back to present dollars? [5]

3. You just received $5,000 as a present for graduating from Saint Peter's. If you invested this $5,000 in a stock portfolio that has an average annual rate of return of 8%, how much money would you have in 50 years (by the time you retire)? [5]

4. You set a goal of having $1,000,000 in 30 years. If we know we can get a rate of return of 14%, how much money will we have to save todayto reach our goal? [5]

5. We would like to have $50,000 in eight years to fully pay off our student loans. If we can invest $1,000 now, what is the rate of return we have to secure in order to achFor Questions 3-6, please write/type out the equation and solve it using either a calculator or Google Sheets/Excel. You can also use the Excel/Google Sheets built-in formulas (FV, PV, RATE, and NPER) to check your answers - but don't rely exclusively on the built-in formulas. You may draw timelines for these questions but it is not mandatory.

1. Why are dollars we get today worth more than dollars we get in the future? [5]

2. How does the concept of an exchange rate relate to how we equate dollars from today with dollars from the future? What are the "exchange rates" that get us from present dollars to future dollars and future dollars back to present dollars? [5]

3. You just received $5,000 as a present for graduating from Saint Peter's. If you invested this $5,000 in a stock portfolio that has an average annual rate of return of 8%, how much money would you have in 50 years (by the time you retire)? [5]

4. You set a goal of having $1,000,000 in 30 years. If we know we can get a rate of return of 14%, how much money will we have to save todayto reach our goal? [5]

5. We would like to have $50,000 in eight years to fully pay off our student loans. If we can invest $1,000 now, what is the rate of return we have to secure in order to achieve this goal? [10]

6. You would like to start saving money for a down payment on your future dream house. If you have $12,000 now and you'd like to reach a goal of $24,000, how long would it take to reach your goal if you can get a 10% annual average rate of return? [5]

7. What is the relationship between the interest rate and future value? What is the relationship between the interest rate and present value? You can use intuition, math, or both to explain. [5]

ieve this goal? [10]

6. You would like to start saving money for a down payment on your future dream house. If you have $12,000 now and you'd like to reach a goal of $24,000, how long would it take to reach your goal if you can get a 10% annual average rate of return? [5]

7. What is the relationship between the interest rate and future value? What is the relationship between the interest rate and present value? You can use intuition, math, or both to explain. [5]

Answer rating: 100% (QA)

1 Why are dollars today worth more than dollars in the future This principle stems from the concept of time value of money TVM Dollars received today ... View the full answer