Identify whether the following statements about the simple and compound interest methods are true or false. Alek is willing to invest $30,000 for eight years, and is an economically rational investor. He has identified three investment alternatives ( A, B, and C) that vary in their method of calculating interest and in the annual interest rate offered. Since he can only make one investment during the eight-year investment period, complete the following table and indicate whether Alek should invest in each of the investments. Note: When calculating each investment's future value, assume that all interest is earned annually. The final value should be rounded to the nearest whole dollar. Finding a present value is the reverse of finding a future value. Which of the following is true about finding the present value of cash flows? Finding the present value of cash flows tells you how much you need to invest today so that it grows to a given future amount at a specified rate of return. Finding the present value of cash flows tells you what a cash flow will be worth in future years at a specified rate of return. Which of the following investments that pay will $15,500 in 8 years will have a lower price today? The security that earns an interest rate of 8.25%. The security that earns an interest rate of 5.50%. Eric wants to invest in government securities that promise to pay $1,000 at maturity. The opportunity cost (interest rate) of holding the security is 6.80%. Assuming that both investments have equal risk and Eric's investment time horizon is flexible, which of the following investment options will exhibit the lower price? An investment that matures in five years An investment that matures in six years Which of the following is true about present value calculations? Other things remaining equal, the present value of a future cash flow increases if the discount rate increases. Other things remaining equal, the present value of a future cash flow decreases if the discount rate increases