13) Your company has determined it can and is willing to pay a monthly mortgage payment of $14,000 (per month) on a loan to buy its headquarters building. Assume that the lender is willing to lend 100% of the purchase price, so your company does need to put down any equity for the purchase. And, you have called the lender and theyve told you they typically lend over 22 years at 3.75% per year interest. What is the maximum amount your company can afford to pay the seller for the building?

a. $ 1,788,897

b. $ 2,470,079

c. $ 2,514,180

d. $ 1,856,942

14) The relationship between the discount (interest) rate and PV is:

a. Indirectly related such that when the rate increases the PV decreases.

b. Directly proportional such that when the rate increases the PV increases.

c. Indirectly related such that when the rate increases the PV increases.

15) You want to accumulate $2,000,000 prior to retirement. If you can earn 12% per yr. and have the next 35 years to save every month, how much would you need to save at the beginning of every month to fulfill your wishes?

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16) You are the lucky winner of the Ohio Lottery ! Congratulations. The Lottery tells you that you have won a $70,000,000 prize that will be paid in annual installments of $3,500,000 for 20 years. If interest rates on alternative investments in the market are 9%, what is the actual value (PV) of your prize? Round to the nearest 1,000, and show your work.