1. Suppose Sarah deposits $1,000 in the bank.
a. How much will she have in 8 years if the interest rate is 7%?
b. How much will she have in 6 years if the interest rate is 9%?
c. How much will she have in 12 years if the interest rate is 2%?
2. Find the present value for
a. $100 received in 4 years if the interest rate is 4%.
b. $100 received in 4 years if the interest rate is 6%.
c. $100 received in 4 years if the interest rate is 2%
d. What happens to the PV as the interest rate changes?
Show calculations