1. You have the opportunity to invest in either of two annuities. Annuity X is an annuity due that makes 5 equal annual payment of $9,500. Annuity Y is an ordinary annuity that makes 5 equal annual payment of $10,000. Assume that you can earn 10% on your investment (1) find the future value after 5 years for both annuities (2) use your finding in part (1) to indicate which annuity is more attractive. Why? 2. You wish to accumulate $30,000 by making equal, end-of-year deposits over the next 6 years. If you can earn 5% on your investment, how much must you deposit at the end of each year to meet this goal? 3. You just won $6 million in the state lottery. You are given the option of receiving a lump sum of $3 million now, or you can elect to receive $200,000 at the end of each of the next 30 years. (1) If you can earn 4% annually on your investments, which option should you take? (2) At what interest rate would you be indifferent in choosing between the two options. (3) At what interest rate, will you choose lump sum payment? At what interest rate will you choose installment? 4. You borrowed $50,000 at 3% annual interest rate that you must repay over 5 years. The loan is amortized into five-equal end-of-year payments. (1) Calculate annual payment amount (2) Prepare a loan amortization schedule (3) If you make equal monthly payment for 60 months, calculate monthly payment amount and prepare a monthly loan amortization schedule (4) How much is total interest charge for 5 years, if you make annual playment? How much is total interest charge for 60 months, if you make monthly payment? Do you pay more interest with annual payment or monthly payment? Why