1. Using the annuity type of financial functions such as PV, FV, PMT, NPER and RATE, solve the following questions a) Suppose you deposit $2,000 on each January 1 from 2013 through 2017, but you need $11,000 on January 1, 2017. What annual interest rate must you have to achieve this goal? (current time is January 1 2012). b) John will invest $50 to plant Christmas trees on his grandfather's farm. When he will be a freshman in college, six years later, he will harvest the trees and sell them for $400. What annual rate of return (i.e. interest rate) will he earn on the investment, assuming it will incur a cost of $30 each year in the interval? c) Given $4,000, how long will it take to triple in value at an interest rate of 8%? What if you had monthly compounding? Depending on the term of the interest payment, you should adjust the interest rate and Nper together. d) A 30 year mortgage bears interest at 9% and has a loan of $150,000. What will the annual payments be? e) How much would you deposit to a savings today to receive $5,000 five years later from now, if the interest is paid by 10% APR compounding (1) annually or (ii) semiannually or (ii) monthly? Depending on the term of compounding, you should adjust Interest Rate and Nper together. (bonus) How much would you deposit at the end of each year for the next five years in order to withdraw $5,000 at the end of 6 years and $10,000 at the end of 7 years, if your savings draw interest at an annual rate of 7%? To solve the question, use the two step procedure . First, calculate the present value of withdrawal in year 6 and 7. Using total of the two PVs, find the annual payment for five years. Problem Nper Payment FV Type Interest Rate B Nper PV Payment FV Interest Rate Annual Monthly Rate PV FV Noer Years Rate Nper PV Payment E Annually Semiannually Monthly Interest Rate Nper FV PV Year 6 Year 7 F Withdraw Yt Rate Nper FV PV of Withdraw Total PV Rate Noer Payment