1.Compute the future value of a $230 cash flow for the same combinations of rates and times:(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Future Value

a.r=10%,t= 9 years$______________

b.r=10%,t= 18 years______________

c.r= 5%,t= 9 years______________

d.r= 5%,t= 18 years______________

2.You will require $630 in 4 years. If you earn 3% interest on your funds, how much will you need to invest today in order to reach your savings goal?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present Value: _____________

3.Old Time Savings Bank pays 3% interest on its savings accounts. If you deposit $1,800 in the bank and leave it there, how much interest will you earn in the first year? The second year? The tenth year?(Do not round intermediate calculations. Round your answers to 2 decimal places.)

Interest

First year _________

Second year_________

Tenth year _________

4.a.What is the present value of a 3-year annuity of $150 if the discount rate is 7%?(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value$ _________

b. What is the present value of the annuity in (a) if you have to wait 2 years instead of 1 year for the first payment?(Round your intermediate and final answers to 2 decimal places.)

Present value$_________

5.A factory costs $430,000. You forecast that it will produce cash inflows of $135,000 in year 1, $195,000 in year 2, and $330,000 in year 3. The discount rate is 12%.

a.Calculate the PV of cash inflows.(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value$___________

b.Is the factory a good investment?

Yes No