1) Your grandfather put some money in an account for you on the day you were born. You are now 25 years old and are allowed to withdraw the money for the first time. The account currently has $35000 in it and pays an APR of 24% interest rate compounded monthly. How much money would be in the account if you left the money there until your 65th birthday?

2) Assume that Social Security promises you $60,000 per year starting when you retire 35 years from today (the first $60,000 will be paid 35 years from now). If your discount rate is 2%, compounded annually, and you plan to live for 25 years after retiring (so that you will receive a total of 26 payments including the first one), what is the value today of Social Securitys promise?

3) You are thinking of purchasing a house. The house costs $350,000. You have $50,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 7% per year. What will your remaining balance after 9 years.

4) If the rate of inflation is 25%, what nominal interest rate is necessary for you to earn a 2% real interest rate on your investment?

5) Suppose a five-year, $100 bond with annual coupons has a price of $70 and a yield to maturity of 18%. What is the bonds coupon rate?

6) CX Enterprises has the following expected dividends: $1 in one year, $1.25 in two years, and $2.95 in three years. After that, its dividends are expected to grow at 4% per year forever (so that year 4s dividend will be 4% more than $2.95 and so on). If CXs equity cost of capital is 10%, what is the current price of its stock?

7) OpenSeas, Inc., is evaluating the purchase of a new cruise ship. The ship will cost $1 billion, and will operate for 15 years. OpenSeas expects annual cash flows from operating the ship to be $100 million and its cost of capital is 10%. Identify the IRR

8) You have to buy a new copier. The cost of the copier is $5000, plus $500 per year in maintenance costs. The copier will last for five years. Alternatively, a local company offers to lease the copier to you and do the maintenance as well. If your discount rate is 10%, what is the most you would be willing to pay per year to lease the copier (your first lease payment is due in one year)?

9) Cellular Access, Inc., a cellular telephone service provider, reported net income of $250 million for the most recent fiscal year. The firm had depreciation expenses of $150 million, capital expenditures of $250 million, and no interest expenses. Net working capital decreased by $25 million. Calculate the free cash flow for Cellular Access for the most recent fiscal year.

10) Ten annual returns are listed in the following table. Negative returns in parenthesis. (39.9%) 16.6% (18%) (43.3) 50% 1.2% (45.6) 16.5% 45.2% (3%) What is the geometric average return over the 10-year period