1. What is the value in year 2 of a $650 cash flow made in year 5 if interest rates are 10 percent?

2. What's the present value, when interest rates are 8.5 percent, of a $165 payment made every year forever?

3. What's the present value, when interest rates are 7.5 percent, of a $140 payment made every year forever?

4. If the present value of an ordinary, 8-year annuity is $8,600 and interest rates are 10.0 percent, whats the present value of the same annuity due?

5. If the future value of an ordinary, 6-year annuity is $8,100 and interest rates are 9.5 percent, whats the future value of the same annuity due?

6. You wish to buy a $9,900 dining room set. The furniture store offers you a 2-year loan with an 10 percent APR. What are the monthly payments?(Do not round intermediate calculations and round your final answer to 2 decimal places.)

Payment

$per month

How would the payment differ if you paid interest only?(Do not round intermediate calculations and round your final answer to 2 decimal places.)

Payment

$per month

8. Ross has decided that he wants to build enough retirement wealth that, if invested at 5 percent per year, will provide him with $4,700 of monthly income for 25 years. To date, he has saved nothing, but he still has 15 years until he retires.

How much money does he need to contribute per month to reach his goal?

9. Rachel purchased a $19,000 car three years ago using a 10 percent, 6-year loan. She has decided that she would sell the car now, if she could get a price that would pay off the balance of her loan.

What is the minimum price Rachel would need to receive for her car?