Finance – Present Value, business and finance homework help

Please answer the question(s) below and show your work.

Assume a bank loan requires an interest payment of $85 per
year and a principal payment of $1,000 at the end of the loan’s eight-year
life. a. At what amount could this loan be sold for to another bank if loans of
similar quality carried an 8.5 percent interest rate? That is, what would be
the present value (PV) of this loan? b. Now, if interest rates on other similar
quality loans are 10 percent, what would be the PV of this loan? c. What would
be the PV of the loan if the interest rate is 8 percent on similar quality
loans