1. Present Value and Multiple Cash Flows Investment X offers to pay you $2,800.00 per year for ten years, whereas Investment offers to pay you $5,200.00 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5.0%? If the discount rate is 20.0%? a. PV of 2,800.00 for 10 years at 5.0% = $_ Points 5 b. PV of 5,200.00 for 5 years at 5.0%= $_ Points 5 C. PV of 2,800.00 for 10 years at 20.0% =$_ Points 5 d. PV of 5,200.00 for 5 years at 20.0% = $_ Points 5 2. Calculating Annuity Values You want to have $ 82,000.00 in your savings account 9 years from now, and you're prepared to make equal annual deposits into the account at the end of each year. If the account pays 5.00% interest, what amount must you deposit each year? Points 10 3. Calculating Annuity Values Vanzan Bank offers you a $ 60,000.00, 10 year term loan at 6.00% annual interest. What will your annual loan payment be? Points 10 4. Calculating EAR Last National Bank charges 6.25% compounded monthly on its business loans. First Diversified Bank charges 6.30% compounded semi-annually. As a potential borrower, which bank would you go to for a new loan? a. Effective rate of 6.25% compounded monthly % Points: 10 b. Effective rate of 6.30% compounded semi-annually = _% Points: 10 5. Calculating APR Calzon Credit Corp. wants to earn an effective annual return on its consumer loans of 6. 20% per year. The bank uses daily compounding on its loans. What interest rate is the bank required by law to report to potential borrowers? % Points: 10