1. As the winner of a radio competition you are offered a choice of one of the following cash prizes. Which should you choose if your discount rate is 8% and why? (Show all working.) HINT: Draw a time-line for each. (a) $4,000 at the end of each year for the next 7 years. (b) $11,400 per year for 4 years with the first payment made 3 years from today. (c) $2,100 per year forever, beginning 1 year from today. (d) $14,000 now. $9,000 3 years from now and $6,000 6 years from now. 2. How much will $6,000 accumulate in 8 years if it earns 4% per annum for the first 5 years and then 7% per annum for the next 3 years? 3. $255,000 is borrowed to purchase a block of land. It is to be repaid with monthly repayments at 4.2% interest over 25 years: (HINT: Use AMORT on your calculator) (a) Calculate the monthly repayments. (b) How much interest is paid over the life of the loan? (c) How much is still owed at the end of 10 years