1. Today, your dream car costs $68,800. You feel that the price of the car will increase at an annual rate of 2.7 percent. If you plan to wait 7 years to buy the car, how much will it cost at that time? 2. You need to have $20,000 for a down payment on a house in 6 years. If you can earn an annual interest rate of 4.2 percent, how much will you have to deposit today? 3. Two years ago, you invested $3,150. Today, it is worth $3,900. What rate of interest did you earn? 4. Which one of the following statements correctly defines a time value of money relationship? A) Time and future values are inversely related, all else held constant. B) Interest rates and time are positively related, all else held constant. C) An increase in a positive discount rate increases the present value. D) An increase in time increases the future value given a zero rate of interest. E) Time and present value are inversely related, all else held constant.