1. (15 pts) Create an excel spreadsheet which lists equivalence factors as in the example below. Use 8.5% for you interest rate. Factors should be calculated to five decimal places. You will use your spreadsheet for later problems in this homework set, so double check your calculations. Print this excel sheet out for n=1 to 25.

2. (10 pts) You want to buy a house in 8 years. You will put money into an investment program which will pay you 5% annual interest (no monthly compounding). You invest $7000 today, and will invest another $7000 at the end of each year for the next 4 years. If you need a 15% down payment on your house, what is the maximum sales price of the house? (neglect taxes, fees, etc.)

3. (10 pts) A company needs to buy a building in 4 years, and must fund the down payment from its profits. The purchase will cost $400,000, of which the company can finance $300,000 at 7%. If the company must make the purchase in 4 years and can receive 12% APR on its savings, compounded monthly, how much must the company save each month to have the required down payment in 4 years?

4. (10 pts) You invest in a scheme today that will pay you $4000 at the end of each of the next five years, plus a lump sum payment of $40,000 when the five years are up. If you require a 12% MARR, compounded monthly, what is the most you should invest today to receive these future cash flows