Please answer problem 1 and 2 in its entirety and show work.

(I point) value of money and compounding into account. 1. Write out the formula to show the relationship between P and F while taking time 2. A medium size consulting engineering firm is trying to decide whether it should replace its office furniture now or wait and do it 1 year from now. If the firm does it now, the cost will be $15,500. If it waits l year, the cost is expected to be $ 16,100. The nominal interest rate is 4% per year. a. 1 point) Draw a cash flow diagram for each of the two alternatives. b. (2 points) Using the given interest rate and annual compounding, should you replace your furniture now or 1 year from now? Show and explainyour rationale