1)

You have just taken out a $25000 car loan with a 8% APR, compounded monthly. The loan is for five years. When you make your first payment in one month, how much of the payment will go toward the principal of the loan and how much will go toward interest?(Note: Be careful not to round any intermediate steps less than six decimal places.) When you make your first payment, _______will go toward the principal of the loan

and _______will go toward the interest.(Round to the nearest cent.)

2)

Suppose the interest rate is 8.0% APR with monthly compounding. What is the present value of an annuity that pays $100 every six months for five

years? (Note: Be careful not to round any intermediate steps less than six decimal places.)

The present value of the annuity is?

(Round to the nearest cent.)

3)

You have an investment opportunity that requires an initial investment of $5,000 today and will pay $6,000 in one year. What is the rate of return of this opportunity?

The rate of return for this opportunity is?

(Round to two decimal places.)

4)

You figure that the total cost of college will be $100,000 per year 18 years from today. If your discount rate is 8% compounded annually, what is the present value today of four years of college costs starting 18 years from today?

The present value today of four years of college costs starting 18 years from today is?

(Round to the nearest dollar.)