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The principal of the time value of money is probably the single most important concept in fanancial management. One of the most frequenty enceuntered epplications involves the calculation of a future yalue. The process for converting present values into future values is called This process requires bnowedge of the values of three of tour time-value -of-money variabies. Which of the following is not one of these variables? The infation rate indicating the change in average prices The duration of the investment (N) The interest rase (I) that could be earned by invested funds The present value (FW) of the amount invested Al weher things being tqual, the numerical difference between a present and a future valoe corresponds to the amouet of interest eamed during the deposit or investment period. Each ine on the following graph corresponds to an interest ratei 0%, 11%, or 21%4. Identify the interest rate that corresponds with each lirte. escrerponds with esth line. Line Ait Line Ss Lhe c Imetianients and loats base their interest cabulations on one of two pocrbie merticdsi the interme and the Investments and loans bate their interest calcvations on ane of two pots.ble metheds the combgound - interest mathads. both methods apply three variatila - the amiunt of prifcipal, the interest rake, and the invesiment or depout between the variabiet. ivested, recosotivaly which equation best represests the calcuiation of a fature walue (fV) iating) Composund intersut? FV={1+1)2}PVPV=PVx(1+1)2PV=PV+(DV1A) fimple interest? PV=PV=(PUIN)PV=PV+(PV1N)PV=PN1N Identify whether the following staberments about the sumpie and compeund interest meengds are true or fase PN=PN+(PVIN)PV=PV1N Idertify whether the following stamements about the simple and compound imeres methods are true or faise Nichelai is wiling to invest s35,000 for six years, and is an ecanomicaty rational iventor, he has idenbifed three investinent altematives (h, 0, and CI that vary in their mechod of calculating interest aod in the annual interest rate offered, since he can oely make ene inveament during the sicyear investmene period, complete the following table and ind case whether Nichslal sheyld inveit in each of the investments. Note: when cateulaking tach invertment's future value, assume that as interest is earned annualy. The final vake should be rounded ts the nearsit. whole doliat

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