1.

What is the future value of a $870 annuity payment over four years if interest rates are 8 percent? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

2.

You are looking to buy a car. You can afford $480 in monthly payments for four years. In addition to the loan, you can make a $1,300 down payment. If interest rates are 7.75 percent APR, what price of car can you afford? (Do not round intermediate calculations and round your final answer to 2 decimal places.)

3.

Suppose that the current 1-year rate (1-year spot rate) and expected 1-year T-bill rates over the following three years (i.e., years 2, 3, and 4, respectively) are as follows:

₁R₁ = 9%, E(₂r₁) = 10%, E(₃r₁) = 10.4%, E(₄r₁) = 10.75%

Using the unbiased expectations theory, calculate the current (long-term) rates for 1-, 2-, 3-, and 4-year-maturity Treasury securities. (Round your answers to 2 decimal places.)