Present and Future Values for Different Interest Rates

Find the following values. Compounding/discounting occurs annually.

a. An initial $200 compounded for 10 years at 4%.

b. An initial $200 compounded for 10 years at 8%.

c. The present value of $200 due in 10 years at 4%.

d. The present value of $1,870 due in 10 years at 8% and at 4%.

e. Define present value and illustrate it using a time line with data from part d. How are present values affected by interest rates?