Suppose that the interest rate is 4 percent. What is the future value of $100 four years from now? How much of the future value is total interest? By how much would total interest be greater at a 6 percent interest rate than at a 4 percent interest rate?

3. A coin collector has a set of coins that are worth $500 now. The coin collector wants to determine the optimal time to sell these coins. The value of the coins at time t is V(t) = 500e0.8t 0.3 If the interest rate is 4 percent, what is the optimal time to sell the set of coins?

Compute the following: The present value of $25,000 each year for 4 years at a 7 percent interest rate The present value of $152,000 each year for 5 years at a 6 percent interest rate The present value of $60,000 each year for 10 years at a 6.5 percent interest rate

Scenario 21-3  Scott knows that he will ultimately face retirement. Assume that Scott will experience two periods in his life, one in which he works an earns income, and one in which he is retired and earns no income. Scott can earn $250,000 during his working period and nothing in his retirement period. He must both save and consume in his work period with an interest rate of 10 percent on savings.  Refer to Scenario 21-3. If the interest rate on savings increases,  a. Scott will always increase his savings in the work period.  b. Scott will increase his savings in the work period if the income effect is greater than the  substitution effect for him.  c. Scott will decrease his savings in the work period if the income effect is greater than the substitution effect for him.  Od. Scott will decrease his savings in the work period if the substitution effect is greater than the income effect for him.  C