Find the values for lump sum

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Reference no: EM132038019

1. Find the following values for a lump sum:

- The future value of $500 invested at 8 percent for one year

- The future value of $500 invested at 8 percent for five years

- The present value of $500 to be received in one year when the opportunity cost rate is 8 percent

- The present value of $500 to be received in five years when the opportunity cost rate is 8 percent assuming:

a. Annual compounding

b. Semiannual compounding

c. Quarterly compounding

2. What is the effective annual rate (EAR) if the stated rate is 8 percent and compounding occurs semiannually? Quarterly?

Reference no: EM132038019

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