1. What is the present value of $14,000 received:
a. 28 years from today when the interest rate is 4% per year?
b. 14 years from today when the interest rate is 4% per year?
c. 7 years from today when the interest rate is 4% per year?
a. 28 years from today when the interest rate is 4% per year?
2. Your cousin is currently 8 years old. She will be going to college in 10 years. Your aunt and uncle would like to have $120,000 in a savings account to fund her education at that time. If the account promises to pay a fixed interest rate of 4.2% per year, how much money do they need to put into the account today to ensure that they will have $120,000 in 10 years?