1)

What is the present value of a $520 perpetuity discounted back to the present at 4.06 percent.

The answer should be calculated to two decimal places.

2)

If you want to have $447,917 in 10 years, how much money should you put in a savings account today?

Assume that savings account pays you 10.0 percent and it is compounded annually. Round the answer to two places

3)

An investment will pay $114 two years from now, $924 four years from now, and $1,414 five years from now. You are going to reinvest these cash flows at a rate of 9.68 percent per year. What is the future value of this investment at the end of year five?

Round the answer to two decimal places.

4)

30 years ago, the average home sale price in your hometown was $79,478. Today the average price of a house is $345,663. What was the average annual rate of change in the price of houses over this time period? (you should calculate the compound growth rate in this problem).

Round the answer to two decimal places in percentage form. (write the percentage sign in the "units" box)

5)

Large -cap stocks had the nominal rate of return of 13.32 percent. The rate inflations during the last year was 3.71 percent. What is the real rate of return for large-cap stocks?

Round the answer to two decimal places in percentage form. (write the percentage sign in the "units" box)

6) You have just purchased an investment that generates the following cash flows for the next four years. You are able to reinvest these cash flows at 3.3 percent , compounded annually.

End of year

1: $402

2: $3,985

3: $883

4: $1,252

What is the percent value of this investment tif 3.3 percent per year is the appropriate discount rate? Round the answer two decimal places.

7)

What is the present value of the following annuity?

$3,916 every half year at the beginning of the period for the next 11 years, discounted back to the present at 9.12 percent per year, compounded semiannually. (Round the answer to two decimal places.)

8)

What is the future value in 29 years of an ordinary annuity cash flow of $963 every quarter of a year a the end of the period, at an annual rate of 7.06 percent per year, compounded quarterly? (Round tithe answer to two decimal places)

9)

Cooling Tools, Inc. is currently producing 624 of small refrigerators per month but the company's CEO plans to increase production at a rate of 9.27 percent per month until the firm is producing 7,245 of refrigerators per month. How many months will this take? (Round the answer two two decimal places)