1.) 2.) 3.) 4.) What is the Present Value of the following cash ows if the appropriate interest rate is 6% AER (EAR, APRl, annual effective rate) ? (a) $2500 received one year from now. (b) $2500 received 10 years from now. (c) $2500 received annually, with the rst payment made one year from now and the last ending in 10 years. (d) $2500 received annually, with the rst payment made one year from now and continuing forever. If you invest $15,000 today at an interest rate of 3% (AER=EAR=annuaI effective rate), how much will you have 10 years from now, assuming no additional deposits or withdrawals in the interim? You want to go to the Olympic games in 7 years and estimate that the total cost will be $4000. You have only $2000 to invest today. What is the annual rate of return on your investment you must get in order to reach your goal with no additional deposits ? If you invest $5,000 annually for the next 40 years and earn 6% per year (that means 40 periodic deposits in both cases below, annuity, AER rate) . . . (a) How much will you have at the end of the 40th year (T40, if the rst deposit is made one year from now (at T1) ? (b) How much will you have at the end of the 40th year (T40), if the rst deposit is made immediately (at T0) and the last at T39 (the beginning of the 40th year) ? You have $150,000 in your account today. How much do you need to deposit to your account at the end of each of the next 30 years (30 deposits), if you want to end up with $1,000,000 in your account (at T30) ? Assume you can invest at 5% AER