1. Grouper Company recently signed a lease for a new office building, for a lease period of 12 years. Under the lease agreement, a security deposit of $12,490 is made, with the deposit to be returned at the expiration of the lease, with interest compounded at 5% per year. What amount will the company receive at the time the lease expires?

2. Monty Corporation, having recently issued a $20,006,100, 15-year bond issue, is committed to make annual sinking fund deposits of $619,000. The deposits are made on the last day of each year and yield a return of 10%.

How much will the fund be at the end of 15 years?

Will it be sufficient to payoff the bonds at maturity?

3. Under the terms of his salary agreement, president Morgan Walters has an option of receiving either an immediate bonus of $82,500, or a deferred bonus of $105,000 payable in 10 years. Ignoring tax considerations and assuming a relevant interest rate of 4%, which form of settlement should Walters accept and support your answer with calculations?