1. School has invested $2.5 million in endowment money, for one year at 6%. If the inflation rate is 2.8% what is the real increase in the value of the endowment fund?

2. What is the future value of $2.5 million invested at 7%, compounded annually for 10 years?

3. After some long-range planning, Saint Leo University has decided to build a new recreation facility in five years. They have received estimates that the facility will cost $14.5 million dollars at that time. They have an investment opportunity that will return 8%. How much do they need to invest today to have $14.5 million at that time?

4. Your star player has previously negotiated a payment of $25 million 5 years from now. They would like to receive payment today. What is the present value of that money if it discounted at 3%, 7%, and 0%?

5. You have deposited $10,000 at your local savings and loan and have been offered an annual interest rate of 3% and the option of annual, semi-annual, or quarterly compounding. Which one will you choose and what is the dollar difference between the three options?

6. Your athletic department needs to purchase three-passenger vans in three years. They project the cost at that time to be $120,000. Currently, you have $98,000 set aside for the vans. What return on your money must you receive to be able to purchase the vans in three years?

7. To entice a new coaching hire, you have promised her that you would deposit $10,000 each year for the next thirty years in a retirement account that will pay 6% interest. How much will be waiting for the coach at the end of thirty years?

8. You have decided to build a new strength and conditioning center. The total cost of the project is $4 million. You have $1.5 million and will be borrowing the balance for ten years at 6% interest. What are your MONTHLY payments?

9. A prominent athletic booster has promised you a $500,000 gift in five years. You were informed by your local bank that they would be willing to give you that $500,000, discounted at 8% today. How much will they give you?

10. Assume that the risk-free rate is 6% and the expected return on the market is 13%. What is the required rate of return on a stock that has a beta of 0.7?