Q. 1. Explain why do we say money has time value?

2. Explain why is it important for business managers to be familiar through time value of money concepts?

3. Define Present Value.

4. Define Future Value.

5. Illustrate what are present value also future value interest factors? (As in PVIF also FVIF)

6. You buy a 6 year, 8% CD for $1,000. Interest is compounded annually. Elucidate how much is it worth at maturity?

7. Illustrate what's the present value of $1,000 to be received in 8 years? (Your required rate of return is 7% a year.)

8. A friend promises to pay you $600 two years from now if you loan him $500 today. Illustrate what interest rate is your friend offering you?

9. If you invest $100 a year for 20 years at 7% annual interest, elucidate how much will you have at the end of the 20th year?

10. Elucidate how much would you be willing to pay today for an investment which pays $800 a year at the end of the next 6 years? (Your required rate of return is 5% a year.)