1. You are looking to buy a car. Your parents say they will give you a loan that you will need to pay back over the next 4 years, making a payment every year. The interest that they charge you is 4%. The loan that they give you is $15,000. What is the amount of each payment that you will make? How much in total interest will you end up paying? Assume payments are made at the end of each year.

2. If you purchase a piece of the art $25,000 and it is expected to appreciate in price by 8% a year, what will the art be worth in 25 years?

3. You have decided to begin saving for retirement. You are currently 20 years old and you would like to retire when are 65. Your goal is to have $3 million when you retire. How much will you need to put away each year to reach your goal assuming that you will make equal payments starting year 1 and ending when you retire and that you will earn 12% on your money? Name two things that would allow you to putaway less each year and still have your money grow to $3 million. Note this is an ordinary annuity.

4. How long will it take you to double your money if you invest it today and earn 12% a year?