1)Which is better for each letter, given the respective rates? (Chapter 16.1)

a/ $5,000 today or $15,692.14 in 10 years (interest rates are 12% compounded annually)

b/ $2,000 in 1 year or $3,000 in 5 years (interest rates are 10% compounded annually)

c/ $3,700 today or $1,000 received at the end of every year for 5 years (rates 11% compounded annually)

d/ $3,700 today or $1,000 received at the end of every year for 5 year (rates 10% compounded annually)

2)DCF and determine which option is better (a or b) for financing the same car, given rates are 6% compounded annually: (Chapter 16.1)

a/ Paying $35,000 today and receive (so subtract from cost) $8,500 in 6 years as a used car resale.

b/ Pay monthly payments (at the beginning of the month) of $499.00 for six years.

3)Southern Pole is developing a special vehicle for Antarctic exploration. The development requires investments of $100,000 today, $200,000 in 1 year from today and $300,000 in 2 years from today. Net returns for the project are expected to be $90,000 at the end of year over the next 15 years. If the company requires a rate of return of 12% compounded annually-find the NPV. (Chapter 16.2)

4)An annuity has $800 end of month over 13 years and the interest rate is 8% compounded monthly. Determine: (Chapter 11)

a.The Future Value of the Annuity

b.The Present Value of the annuity

5)You won the lottery today and deposited your $1,250,000.00 into a bank account that pays 6% compounded semi-annually for 4 years......finished school and retired. Then while living in Jamaica, you will begin taking out beginning of the month deposits from your winnings for an estimated 50 years. How large are your beginning of the month payments? (Chapter 13.3*)

7) A loan of $200,000 taken out today at 7% compounded quarterly, will be repaid with monthly payments at the end of the month over 13 years. Determine: (Chapter 12)

a. The size of the equal payments needed to pay off the loan

b. The total amount paid, to fully pay-off the loan

c. The total amount of interest paid over the course of the loan

8) What interest rate compounded annually would be required to allow you to make $1,000 end of year withdrawals from an initial account of $11,517.41 for 15 years? (Chapter 11)

9) How long (in years) would it take to accumulate $60,000 at 5% compounded quarterly, with $400 end of month payments? (Chapter 12)

10*) Saving up for her retirement, Mrs. Petersoo decides to start making $720 beginning of month deposits into an account that pays 3% compounded quarterly. After 7 years, she will then retire and begin making $1,400 end of the month withdrawals from the 3% compounded quarterly account. How long, in years, will her retirement fund last her before running out?(Chapter 11,12,13)