1. Someone gives you an asset that will pay $200 per year for 10 years (t=1,10) and will earn 9.5% interest per year. For how much could you sell this investment at t = 5?

2. How much would you need to save each month to accumulate $2,000,000 at the end of 30 years if the prevailing APR is 6%?

3. You have the opportunity to invest (spend) $1000 today for a promised future cash inflow of $600 at the end of year one and $800 at the end of year 2. Assume the discount rate is 7% in year 1, and 8% in year 2. What is the present value of this investment (includes all three cash flows)?

4. Suppose that we have a perpetuity whose first two cash flows (t=1 and 2) are $1,000 but all future cash flows grow at 3% (i.e., the first grown cash flow occurs at t=3). What is the present value of this perpetuity if the discount rate is 8%?