1.Ethan sells his car to Seamus. Seamus promises to pay Ethan $1,030 at the end of each year for 9years. What is the present value of Seamus's promised payments if the interest rate is10%?

2.You are trying to calculate how much money you should have at retirement. On your 51 st birthday you will retire and immediately make your first withdrawal of 2,307.69.You plan to make 52 such withdrawals each year. You plan to continue withdrawing at that level and frequency until you are 66 years old. (Assume beginning of period withdrawals with the first withdrawal on your retirement date and no withdrawal on your final birthday.) During retirement your savings will earn only 4.4% per annum. How much do you have to have saved at retirement to fund these planned withdrawals?

3.In 1752, Britain consolidated all government debt into a single issue called 'Consol' bonds. Consol bonds were perpetual and initially paid an annual coupon of3.5%. Since issue, the coupon rate has been changed from time-to-time: assume that it is currently $54per year (in equivalent US$) with the next coupon due in one year. What is the fair price for a Consol bond (present value of the stream of coupon payments) if the appropriate interest rate is 5%?

4.You borrowed $300,000 exactly 10years ago. The loan is structured as an amortized loan. The interest rate is 8%and you make quarterly (end-of-quarter) payments of $6,960.82.The loan is amortized over 25years. How much principal have you paid over the first 10 years?

5.

You are considering the purchase of a BMW M5. You will borrow the money from BMW Financial Services. The terms of the deal are outlined below:

BMW M5
RWD, 500hp, 0-100 in 4.7s
MSRP = $80,000
Term = 72 months
APR = 3%
Down Payment = $0
Monthly Payments = 1,215.49

The amortized loan payments are a blend of interest and principal. What is the total amount of interest you would pay over the life of the loan? Assume that taxes are zero.

What is the total amount of interest you would pay over the life of the loan?

6.A Hummer H3 sells for $90,000tax included. GMAC lends money at the rate of 5.4% APR. If you buy the car and borrow through GMAC, then what are the monthly (end-of-month) payments for a 7-year term