Questions:

The Present Value Calculator provided by TimeValue Software, computes the present value of a given future balance.

1. Use this calculator to compute the present discounted value of $1,000 that is received in 5 years when the interest rate is 5% (enter dates in the MM-DD-YR format and be sure that the year is incremented by 5).
2. Repeat (a), but assume that the interest rate is 10%. How does an increase in the interest rate affect the present discounted value of a future payment?
3. Repeat (a), but assume that the payment is received in 10 years. How does this affect the present discounted value of this payment?