1.Your car loan requires payments of $200 per month for the first year and payments of $400 per month during the second year. The monthly interest rate is 1% and payments begin in one month. What is the present value of this two-year loan?

2.You found your dream house. It will cost you $175,000 and you will put down $35,000 as a down payment. For the rest you get a 30-year, 6.25% mortgage. What will be your monthly mortgage payment (assume no early repayment)?

3.

1. Which of the following will increase the present value of an annuity, other things equal?

   		Increasing the interest rate.
   		Decreasing the interest rate.
   		Decreasing the number of payments.
   		Decreasing the amount of the payment.