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BUSINESS FINANCE FIN 3200 ASSIGNMENT 3 INDIVIDUAL ASSIGNMENT DUE MAY 25, 2020 [Total Points 25] SHOW ALL WORK INCLUDING TIME LINE Problem 1: (a) Calculate the future value of $1,250, 7- year annuity invested at 9% APR. (b) What would be the future value of an equivalent annuity due payments ? (c) Calculate the present value of $1,750, 5-year annuity using a discount rate of 12% APR. (d) What would be the present value of an equivalent annuity due payments? Problem 2: (a) What is the future value of the following unequal cash flows using 9% interest rate? YEAR 3 5 CASH FLOW $600 $800 $500 $400 $900 (b) What would be an annuity payment (PMT) that would give the same future value using the same interest rate and same number of years? (c) What is the present value of the following unequal cash flows using 7.5% interest rate? YEAR 2 CASH FLOW $950 $860 $520 $770 (d) What would be the an annuity payment (PMT) that would give the same present value using the same interest rate and same number of years? Problem 3: (a) Calculate the effective annual rate (EAR) for each, given the nominal rate of 12% (APR) and the following compounding frequencies: (1) quarterly (II) monthly (IHI) daily. (b) Calculate the nominal rate (APR) for each, given the effective annual rate of 12% (EAR) and the following compounding frequencies: (1) quarterly (II) monthly (II) daily. (c) Calculate the periodic rate in percent for each, given the nominal rate of 12% (APR) and the following compounding frequencies: (1) quarterly (II) monthly (1) daily. (d) State which of the following statements are true? Nominal rate = Effective rate = Periodic rate for annual compounding. (ii) Effective rate > Nominal Rate > Periodic rate for compounding other than annual compounding

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