Explain two factors that affect the present value of asset

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1. Which is better, a present value of $100 or a future value of $100? Please explain

2. Define and explain two factors that affect the present value of an asset.

3. In five years, what is the future value of $4,000 if the interest rate is 10% and money is compounded monthly? What is the future value if the money is compounded semi-annually?

4. Clark has an investment proposal that invites him to invest $1.000 a year for ten years in a hotel and promises to pay him a return of 11% per year. If Clark agrees, how much will his investment be worth at the end of ten years?

5. What is the maximum amount of money you should pay for an investment today that is projected to yield $8,000 in four years if the market rate of interest is 12% and the money is compounded semi-annually? What would be the present value if the money is compounded monthly?

Reference no: EM13724939

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