You must complete all the questions on a Microsoft Excel file. You have to show all the formulas in order to complete this assignment

3. You are offered the following investment: investing $500 today and receiving $600 in 5 years.

(a) What is the implied interest rate for this investment?

(b) You can also deposit the money into a bank account that pays 4% annually. Suppose the risks are similar, which investment would you choose?

5. Consider the following timeline:

If the current market rate of interest is 9%, what is the present value (PV) of this timeline as of year 0?

8. An investment will provide you with $100 at the end of each year for the next 10 years.

What is the present value of that annuity if the discount rate is 8% annually?

What is the present value of the above if the payments are received at the beginning of each year?

Date 2 $100 $200 $300 Cash flow