1. Jenny bought a rental property for $900,000 and leased it for 3 years. Rents will be paid at the beginning of each month and the residual value after 3 years will be $700,000. To earn 8% rate of return per year on this lease, how much rent/month should be charged?

2. Coyote Inc. issues $5,000,000 of 6% bonds due in 5 years with interest payable at year-end. The current market rate of interest for bonds of similar risk is 4%. What amount will Coyote receive when it issues the bonds?

Instructions: use the Compound interest tables to solve

-Future value of 1 (future value of a single sum)

-Present value of 1 (present value of a single sum)

-Future value of an ordinary annuity of 1

-Present value of an ordinary annuity of 1

-Present value of an annuity Due of 1