1. (Compound annuity) What is the accumulated sum of each of the following streams of payments? a. $480 a year for 10 years compounded annually at 9 percent. b. $108 a year for 7 years compounded annually at 7 percent. c. $32 a year for 12 years compounded annually at 11percent. d. $22 a year for 4 years compounded annually at 4 percent.

2. (Perpetuities) What is the present value of the following? a. A $400 perpetuity discounted back to the present at 14 percent b. A $1,000 perpetuity discounted back to the present at 18 percent c. A $110 perpetuity discounted back to the present at 15 percent d. A $80 perpetuity discounted back to the present at 11 percent

3.(Future value) Sarah Wiggum would like to make a single lump-sum investment and have $2.5 million at the time of her retirement in 35 years. She has found a mutual fund that expects to earn 4 percent annually. a. How much must Sarah invest today If Sarah can earn 4 percent annually for the next 35 years? b. If Sarah earned an annual return of 14 percent, how much must she invest today?

4. (Complex present value) You would like to have $47,000 in 14 years. To accumulate this amount, you plan to deposit each year an equal sum in the bank, which will earn 8 percent interest compounded annually. Your first payment will be made at the end of the year. a. How much must you deposit annually to accumulate this amount $47,000 in 14 years? b. If you decide to make a large lump-sum deposit today instead of the annual deposits, how large should this lump-sum deposit be? (Assume you can earn 8 percent on this deposit.) c. At the end of 5 years you will receive $8,000 and deposit this in the bank toward your goal of $47,000 at the end of 14 years. In addition to this deposit, how much must you deposit in equal annual deposits to reach your goal? (Again assume you can earn 8 percent on this deposit.) Question content area bottom cent.)

5. (Compound value) The Aggarwal Corporation needs to save $7 million to retire a $7 million mortgage that matures in 13 years. To retire this mortgage, the company plans to put a fixed amount into an account at the end of each year for 13 years, with the first payment occurring at the end of 1 year. The Aggarwal Corporation expects to earn 14 percent annually on the money in this account. What equal annual contribution must it make to this account to accumulate the $7 million in 13 years? A. In order to retire a $7 million mortgage that matures in 13 years, what equal end-of-year contribution must the Aggarwal Corporation make to an account that earns 14 percent annually?(Round to the nearest dollar.)

6. (Solving for r with annuities) Nicki Johnson, a sophomore mechanical engineering student, receives a call from an insurance agent, who believes that Nicki is an older woman ready to retire from teaching. He talks to her about several annuities that she could buy that would guarantee her an annual fixed income. The annuities are as follows in the popup window: LOADING... . If Nicki could earn 8 percent on her money by placing it in a savings account, should she place it instead in any of the annuities? Which ones, if any? Why? Question content area bottom Part 1 a. What rate of return could Nicki earn on her money if she place it in annuity A with $8,000 payment per year and 12 years duration? enter your response here% (Round to two decimal places.) Part 2 If Nicki could earn 8 percent on her money by placing it in a savings account, should she place it instead in annuity A?(Select the best choice below.) A.No. Nicki should not place her money in annuity A because the expected rate of return on the annuity is smaller than the one on the savings account. B.Yes. Nicki should place her money in annuity A because the expected rate of return on the annuity is greater than the one on the savings account. b. What rate of return could Nicki earn on her money if she place it in annuity annuity B with $8,500 payment per year and 22 years duration? % (Round to two decimal places.) part 2 If Nicki could earn 8 percent on her money by placing it in a savings account, should she place it instead in annuity B?(Select the best choice below.) A. No. Nicki should not place her money in annuity B because the expected rate of return on the annuity is smaller than the one on the savings account. B.Yes. Nicki should place her money in annuity B because the expected rate of return on c. What rate of return could Nicki earn on her money if she place it in annuity annuity C with $6,500 payment per year and 16 years duration? % (Round to two decimal places.) part 2 If Nicki could earn 8 percent on her money by placing it in a savings account, should she place it instead in annuity C?(Select the best choice below.) A.No. Nicki should not place her money in annuity C because the expected rate of return on the annuity is smaller than the one on the savings account. B.Yes. Nicki should place her money in annuity C because the expected rate of return on the annuity is greater than the one on the savings account. ANNUITY INITIAL PAYMENT INTO ANNUITY (AT t = 0) AMOUNT OF MONEY RECEIVED PER YEAR DURATION OF ANNUITY (YEARS) A 60,000 8,000 12 B 90,000 8,500 22 C 60,000 6,500 16

7. (Solving for PMT of an annuity) To pay for your child's education, you wish to have accumulated $18,000 at the end of 14 years. To do this, you plan on depositing an equal amount into the bank at the end of each year. If the bank is willing to pay 13 percent compounded annually, how much must you deposit each year to reach your goal? To reach your goal, your annual deposit must be. (Round to the nearest cent.)

8. (Solving for r in compound interest) You lend a friend $6,000, for which your friend will repay you $20,000 at the end of 10 years. What interest rate are you charging your friend? The interest rate you are charging your friend is enter your response here%. (Round to two decimal places.)

9. (Present value) What is the present value of the following future amounts? a. $600 to be received 9 years from now discounted back to the present at 11 percent b. $300 to be received 7 years from now discounted back to the present at 8 percent c. $1,050 to be received 11 years from now discounted back to the present at 4 percent d. $1,200 to be received 4 years from now discounted back to the present at 18 percent

10. Solving for r of an annuity) You lend a friend $20,000, which your friend will repay in 10 equal annual end-of-year payments of $4,000, with the first payment to be received 1 year from now. What rate of return does your loan receive? The rate of return your loan will receive is %. (Round to two decimal places.)

11. (Solving for n with nonannual periods) About how many years would it take for your investment to grow threefold if it were invested at an APR of 11 percent compounded If you invest $1 at an APR of 11 percent compounded weekly, about how many years would it take for your investment to grow threefold to $3? Round to the nearest whole number.)

12. (Compounding using a calculator and annuities due) Imagine that Homer Simpson actually invested $100,000 8 years ago at a 12 percent annual interest rate. If he invests an additional $2,500 a year at the beginning of each year for 10 years at the same 12 percent annual rate, how much money will Homer have 10 years from now? a. If Homer invested $100,000 8 years ago at a 12 percent annual interest rate, what is the future value of this investment 10 years from now? (Round to the nearest cent.) b. If Homer invests an additional $2,500 a year at the beginning of each year for 10 years at the same 12 percent annual rate, what is the future value of this investment 10 years from now? (Round to the nearest cent.) c. How much money will Homer have 10 years from now? (Round to the nearest cent.)

13.(Compound annuity) You plan on buying some property in Florida 4 years from today. To do this, you estimate that you will need $35,000 at that time for the purchase. You would like to accumulate these funds by making equal annual deposits in your savings account, which pays 6 percent annually. If you make your first deposit at the end of this year, and you would like your account to reach $35,000 when the final deposit is made, what will be the amount of your deposits? The amount of your end-of-year deposits will be ?. (Round to the nearest cent.)

14. (Solving for r in compound interestfinancial calculator needed) In September 1963, the first issue of the comic book X-MEN was issued. The original price for that issue was $0.12. By September 2017, 54 years later, the value of the near-mint copy of this comic book had risen to $54,400. What annual rate of interest would you have earned if you had bought the comic in 1963 and sold it in 2017? The annual rate of interest you would have earned %. (Round to two decimal places.)

15. (Nonannual compounding using a calculator) Ford's current incentives for customers looking to buy a Mustang include either financing at an APR of 4.3 percent compounded monthly for 72 months or $1,200 cash back. Let's assume Suzie Student wants to buy the premium Mustang convertible, which costs $33,000, and she has no down payment other than the cash back from Ford. If she chooses the $1,200 cash back, Suzie can borrow from the VTech Credit Union at an APR of 6.3 percent compounded monthly for 72 months. What will Suzie Student's monthly payment be under each option? Which option should she choose? a. If Suzie chooses 4.3 percent financing for 72 months to buy the premium Mustangconvertible, which costs $33,000, what will her monthly payment be? Round to the nearest cent.) b. If Suzie chooses $1,200 cash back to buy the premium Mustang convertible and borrow $31,800 fom the VTech Credit Union at an APR of 6.3 percent compounded monthly for 72 months, what will her monthly payment be? (Round to the nearest cent.) c. Which option should Suzie Student choose?(Select the best choice.) A. Choose low interest rate financing because the monthly payment under this option is lower. B. Choose cash back financing because the monthly payment under this option is lower. Reference ANNUITY INITIAL PAYMENT INTO ANNUITY (AT t = 0) AMOUNT OF MONEY RECEIVED PER YEAR DURATION OF ANNUITY (YEARS) A 60,000 8,000 12 B 90,000 8,500 22 C 60,000 6,500 16

16. (Future value) Giancarlo Stanton hit 59 home runs in 2017. If his home-run output grew at a rate of 8 percent per year, what would it have been over the following 5 years? a. Giancarlo Stanton hit 59 home runs in 2017. If his home-run output grew at a rate of 8 percent per year, what would it have been in 2018? enter your response here hits(Round to the nearest unit.) b. Giancarlo Stanton hit 59 home runs in 2017. If his home-run output grew at a rate of 8 percent per year, what would it have been in 2019? enter your response here hits(Round to the nearest unit.) c. Giancarlo Stanton hit 59 home runs in 2017. If his home-run output grew at a rate of 8 percent per year, what would it have been in 2020? enter your response here hits(Round to the nearest unit.) d. Giancarlo Stanton hit 59 home runs in 2017. If his home-run output grew at a rate of 8 percent per year, what would it have been in 2021? enter your response here hits(Round to the nearest unit.) e. Giancarlo Stanton hit 59 home runs in 2017. If his home-run output grew at a rate of 8 percent per year, what would it have been in 2022? enter your response here hits(Round to the nearest unit.)

17.(Nonannual compounding using a calculator) Dennis Rodman has a $4,500 debt balance on his Visa card that charges an APR of 13.1 percent compounded monthly. Dennis's current minimum monthly payment is 3 percent of his debt balance, $135. How many months (round up) will it take Dennis to pay off his credit card if he pays the current miminum payment of $135 at the end of each month? Part 1 How many months will it take Dennis to pay off his credit card?(Round up to the nearest unit.)

18.(Loan amortization) To buy a new house, you must borrow $175,000. To do this, you take out a $175,000, 25-year, 9 percent mortgage. Your mortgage payments, which are made at the end of each year (one payment each year), include both principal and 9 percent interest on the declining balance. How large will your annual payments be? The amount of your annual payments will be? Round to the nearest cent.)

19. (Compound value solving for n) How many years will the following take? a. $490 to grow to $1,155.39 if invested at 10 percent compounded annually b. $42 to grow to $70.44 if invested at 9 percent compounded annually c. $100 to grow to $347.85 if invested at 12 percent compounded annually d. $54 to grow to $63.17 if invested at 4 percent compounded annually

20. (Compounding using a calculator) Lisa Simpson wants to have $1.6 million in 35 years by making equal annual end-of-the-year deposits into a tax-deferred account paying 9 percent annually. What must Lisa's annual deposit be?