1.1. Imprudential, Inc., has an unfunded pension liability of $411 million that must be paid in 19 years. To assess the value of the firms stock, financial analysts want to discount this liability back to the present. If the relevant discount rate is 7.9 percent, what is the present value of this liability?

2. Calculate the future value if present value (PV) = $1106, interest rate (r) = 6.8% and number of years (t) = 14

3. Your coin collection contains fifty 1952 silver dollars. If your grandparents purchased them for their face value when they were new, how much will your collection be worth when you retire in 2063, assuming they appreciate at an annual rate of 5.4 percent?

4. Compute the number of years (t) if future value (FV) = $10174, present value (FV) = $1498, and interest rate (r) = 14.7%,.

5. Suppose you are committed to owning a $343,000 Ferrari. If you believe your mutual fund can achieve an annual rate of return of 12.0 percent and you want to buy the car in 9 years (on the day you turn 30), how much must you invest today?

6. Compute the interest rate if future value (FV) = $11407, present value (FV) = $2631, and a number of years (t) = 10.

7. Compute the present value if future value (FV) = $4958, interest rate (r) = 12.2%, and number of years (t) = 11.

8. Although appealing to more refined tastes, art as a collectible has not always performed so profitably. During 2003, Sothebys sold the Edgar Degas bronze sculpture Petite Danseuse de Quatorze Ans at auction for a price of $9.66 million. Unfortunately for the previous owner, he had purchased it in 1999 at a price of $12.36 million. What was his annual rate of return on this sculpture?

9. Youre trying to save to buy a new $249,000 Ferrari. You have $50,000 today that can be invested at your bank. The bank pays 7.2 percent annual interest on its accounts. How long will it be before you have enough to buy the car?