1.

You would like to purchase a vacation home when you retire 8 years from now. The current cost of the homes that interest you is $240,074; however, you expect their price to rise at 2.64% per year for the next 8 years. How much must you save each year in nominal terms (the same amount each year) for 19 years, starting next year, to just be able to pay for the vacation home if you earn 3.37% APR (compounded annually) on your investments?

2.

You expect that you will need to replace your furnace in 4 years at a cost of $15,415. How

much must you save today in an account that pays 2.27% APR (compounded monthly) to exactly pay the $15,415 in 4 years?

3.

You manage an investment fund that sells annuities. You sell a 7-year ordinary level annuity that makes monthly payments of $2,512 per month, starting next month. If interest rates are 2.84% APR (compounded monthly) what is the current price of this annuity?