1

The annual asset tax rate in a city is 4%. If you buys a house for $250000, what is the present value of all future tax payments? Assume a 6% interest rate and that the house value is fixed.

2

Assume a 10% interest rate. Calculate the present value of:

An asset that pays $10 per year forever; An asset that pays $3 per year in 7 years;

3

Assume 8% interest rate

You need to pay $12000 tuition fee at the end of each year in the next 6 years. What is the amount that you need to prepare today to pay all the tuition fees in the next 6 years?

Assume that you have 60476 USD right now. After paying the tuition fees in the next 6 years, what is the remaining amount at the end of year 6