If the interest rate this year is 8% and the interest rate next year will be 10%, what is the future value of $1 after 2 years? what is the present value of a payment of $1 to be received in 2 years?

the interest rate is 8% for first year and 10 % for the second year for 1$.

Interest for 1st year = (P. N. R) / 100 = (1.1.8) / 100 = 8/100=0.08.

Now the amount will be 1.08 for first year.

Here N=1 because we are calculating interest from first year

interest for second year = (P. N. R) / 100 = (1.08.1.10) / 100=1.8/100=0.018.

now the 1$ after two year with two interest rates will be (1.08+0.018) = 1.098$.