1. You obtain a loan for $10,000, and are required to pay back the loan in 4 annual payments of

$2700. Diagram the cash flow for this situation.

2. Write the formula for a single payment compound amount factor. Then determine the future

worth of a $10,000 investment earning 4.25% interest.

3. Without looking it up, write the formula for a single payment present worth factor by using the

formula for a single payment compound amount factor.

5. A(P/A, g, i, N)(F/P, i, N) = _________________ worth? (Fill in the blank.) How did you derive

your answer?

6. In a linear of geometric gradient series, what is the value of G or g at the end of year 1?

7. List two methods that you could use to find an unknown interest rate. For example, if you made

an investment and you wanted to double its worth in 10 years, how much growth per year would

this require of your investment? (Growth in the investment is equivalent to interest rate.)