1) After a recent sale of your business, you decided to donate $1.5 million to your local university to fund a scholarship fund. Assume the university can earn 6% interest rate on its investments. You want the scholarship to be paid out annually, and the first scholarship to be paid out in one year. You also want that the annual scholarship amount increases with inflation thereafter. The inflation is expected at 2%. What will be the amount of the first year scholarship and the second year scholarship? a) $ 60,000; $ 60,000 b) 60,000; $ 61,200 c) 61,200; $ 61,200 d) $ 60,000; $ 63,600 e) $ 61,200; $ 63,600 f) $ 63,600; $ 64,872 2) A bank offers a home buyer a 30-year loan at 5% interest per year. If the home buyer borrows $230,000 from the bank, how much must be repaid every year? Assume that the payments are annual and that the first payment is due at the end of the first year. a) 14,961.83 b) 13,859.99 c) 15,888.95 d) 15,185.26 e) 14,249.36 f) 16,537.11 3) A businessman wants to buy a truck. The dealer offers to sell the truck for either $150,000 now, or six equal annual payments of $30,500, due at the end of each year. Which of the following is closest to the interest rate being offered by the dealer? a) 7.3% b) 6.3% c) 6.8% d) 7.0% e) 6.0% f) 5.8%