1. When you retire, you would like to have a monthly pension of $8,000 per month for 30 years. Assume you have just had your 25th birthday and you intend to contribute monthly to your retirement fund until you are 60. The month after that you will start taking your pension. Your investment advisor has found a guaranteed investment for your fund that will yield 8% per year compounded quarterly (hint: you need to find an equivalent effective monthly rate to be used for calculation purposes) for the duration of your pension needs. How much should you contribute each month to your retirement fund, assuming your contributions start one month after your 25th birthday?

2. Five months from today your company will begin receiving cash flows of $10,000 paid every eight months. The last of these $10,000 flows will occur 69 months from today. Calculate the present value (value today, time 0) of these cash flows. The discount rate provided to you by your accountant is 5% per year compounded quarterly.