1. Find the maximum price that you would be willing to pay today for the following stream of cash flows promised at the end of for years 1 through 6, respectively-- $5,000; $8,000; $10,000; $10,000; $10,000; $10,000. Assume that your required rate of return on this investment is 10%.

$38,588.67

$35,055.40

$31,709.52

$39,884.49

$37,354.26

2. An investment promises the following stream of cash flows promised at the end of for years 1 through 6, respectively-- $5,000; $8,000; $10,000; $10,000; $10,000; $10,000. The investment is selling for $28,000 today. What is the rate of return implied by this investment?

17.18%

12.05%

14.54%

19.61%

22.32%

3. You borrow $80,000 today at an interest rate of 8% (APR). The loan must be paid back in equal monthly installments over a period of 10 years. Find the amount of the monthly installment. The first payment is due one month from today.

$993.53

$437.29

$970.62

$691.35

$533.39

4. You borrow $80,000 today at an interest rate of 8% (APR). The loan must be paid back in equal monthly installments over a period of 10 years. The SECOND month's payment reduces the principal balance on the loan by:

$449.07

$446.09

$440.20

$443.14

$437.29

5. You borrow $80,000 today at an interest rate of 8% (APR). The loan must be paid back in equal monthly installments over a period of 10 years. The lender agrees to lets you make monthly payments of $400 on this loan. What will be the required "balloon payment" at the end of the 10 years?

$81,374.05

$170,749.63

$103,178.50

$73,178.41

$104,392.80