1. Thomas Taylor is saving for an Australian vacation in three years. He estimates that he will need $5,850 to cover his airfare and all other expenses for a week-long holiday in Australia. If he can invest his money in an S&P 500 equity index fund that is expected to earn an average annual return of 9.1 percent over the next three years, how much will he have to save every year if he starts saving at the end of this year? (Round factor values to 4 decimal places, e.g. 1.5212 and final answer to 2 decimal places, e.g. 15.25.)

2.Your grandfather is retiring at the end of next year. He would like to ensure that his heirs receive payments of $10,300 a year forever, starting when he retires. If he can earn 8.9 percent annually, how much does your grandfather need to invest to produce the desired cash flow? (Round answer to 2 decimal places e.g. 15.25.)

3. You are evaluating a growing perpetuity investment from a large financial services firm. The investment promises an initial payment of $15,200 at the end of this year and subsequent payments that will grow at a rate of 3.7 percent annually. If you use a 9 percent discount rate for investments like this, what is the present value of this growing perpetuity? (Round answer to 2 decimal places, e.g. 15.25.)

4. Cullumber Productions borrowed some money from the California Finance Company at a rate of 18.00 percent for a seven-year period. The loan calls for a payment of $1,565,000 each year beginning today. How much did Cullumber borrow? (Round factor values to 4 decimal places, e.g. 1.5214 and final answer to nearest whole dollar, e.g. 5,275.)