# solution

1. Exercise One: Compute the Future Value of 1,000 USD (U.S. Dollars), 125 years from today, if the interest rate is 8.25%, assuming:

(a) simple interest,
(b) daily compounding,
(c) continuous compounding.
(Hint: Extra Credits will be given for verifying your discrete compounding answers by using the FV function in Excel – as shown in class).

2. Exercise Two: Compute the Future Value of 100 USD (U.S. Dollars), 250 years from today, if the interest rate is 3.25%, assuming:
(a) simple interest,
(b) daily compounding,
(c) continuous compounding.
(Hint: Extra Credits will be given for verifying your discrete compounding answers by using the FV function in Excel – as shown in class).
3. Exercise Three: Compute the Present Value of 500,000 USD (U.S. Dollars), received 75 years from today, if the interest rate is 13.45%, assuming:
(a) simple interest,
(b) daily compounding,
(c) continuous compounding.
(Hint: Extra Credits will be given for verifying your discrete compounding answers by using the PV function in Excel – as shown in class).

4. Exercise Four: Compute the Present Value of 20,000,000 USD (U.S. Dollars), received 125 years from today, if the interest rate is 7.65%, assuming:
(a) simple interest,
(b) daily compounding,
(c) continuous compounding.
(Hint: Extra Credits will be given for verifying your discrete compounding answers by using the PV function in Excel – as shown in class).

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