1. Adams Company bought a piece of land in 1981 for $200,000. By 2005, its value had increased to $1 million. Find the annual rate of appreciation during this period.

2. Ahsan Co bought a piece of land in 1991 for $160,000 which appreciated in value at the rate of 3% per year for the first three years and then at the rate of 4% for the next four years. Find its value after 7 years.

3. Your employer has promised to give you a $5,000 bonus after you have been working for him for 5 years. What is the present value of this bonus if the proper discount rate is 8%?

4. The U.S. government fixed the price of gold at $35 an oz in 1934. In 2005, the price of the yellow metal was $480 an oz. Calculate the price appreciation of gold as percent per year, compounded annually

5. You expect to receive $10,000 as a bonus after 6 years. You have calculated the present value of this bonus and the answer is $7000. What interest rate did you use in your calculation? 6. You decide to put $10,000 in a money market fund that pays interest at the annual rate of 7.2%, compounding it monthly. You plan to take the money out after one year and pay the income tax on the interest earned. You are in the 25% tax bracket. Find the total amount available to you after taxes.

7. Suppose you have decided to put $200 at the beginning of every month in a savings account that credits interest at the annual rate of 6%, but compounds it monthly. Find the amount in this account after 30 years.

8. Suppose you deposit $125 on the first of every month for 240 months, and the bank credits interest at the end of every month at the annual rate of 6%. How much money do you have in your account at the end of 20 years?

9. You have started a job with an annual salary of $48,000. You will get the paycheck at the end of each month, and your deductions for taxes will be 34%. Using a discount rate of 0.8% per month, find the present value of the take home pay for the whole year.

10. Suppose you want to accumulate $10,000 for a down payment for a house. You will deposit $400 at the beginning of every month in an account that credits interest monthly at the rate of 0.6% per month. How long will it take you to achieve your goal?

11. Suppose you deposit $300 at the beginning of each month in a savings account that pays interest at the rate of 6% per year, with monthly compounding. How long will it take you to accumulate $25,000 in this account?

12. Suppose you are a property owner and you are collecting rent for an apartment. The tenant has signed a one-year lease with $600 a month rent, payable in advance. Find the present value of the lease contract if the discount rate is 12% per year.

13. West Bank gives consumer loans at the annual interest rate of 8.25%. Suppose you take out a $5,200 loan for 36 months, what will your monthly payment be?

14. Adana Corporation is interested in buying a building for $500,000 in cash, or it may pay for it in 50 monthly installments of $12,000 each. If the proper discount rate for Adana is 9%, which method should it use?

15. You have bought a car. The car dealer offers two payment plans: (A) Make 48 monthly payments of $130 each, or (B) Make 36 payments of $165 each. If the time value of money is 12% per year, which plan is cheaper for you?

16. Bennington Company has borrowed a certain amount from the bank that it will repay in 24 monthly installments. The bank charges 6% interest annually on this loan and the monthly payment is $6000. Find the amount of loan.

17. You want to buy a piece of land and the owner would sell it to you for $20,000 cash. Alternatively, he would let you pay for it with five annual installments of $5,000 each, the first one due right now. What is the implied interest rate here?