1 . Your rich uncle just died and left you a nice gift in his will. You will receive $10,000 per year for five years starting next year. Eight years after that finishes, you will receive $5,000 per year for ten years. Interest rates are 3%. What is the present value of this gift? State all assumptions and show all work!

2.You have an automatic stipend set up with your bank, where you will receive $130 per quarter for the next six years. If annual interest rates are 4.5%, what is the present value of this stipend?

3.

Find the present value for each of these cash flows:

An annuity paying $250,000 for 7 years, interest rates are 4%

A growing perpetuity paying out $120,000 this year, growing at 1% with interest rates at 4%

Cash flows of $500,000 this year, again in 2 years, and again in 6 years, interest rates are 4%