1.Jackson just received a settlement in a lawsuit that promises two future payments of $400, the first payment at the end of the 6th year, and the second at the end of the 11 year. Jackson, being profligate, doesn't want to wait and instead wants instead to spend all of the settlement money today. What is the present value of his settlement assuming the interest rate of 9%?

2.Jordon places the amount of $625 in a bank savings account today that offers an annual interest rate of 7.55% compounded 12 times per year. How much will Jordon have in his account 7 years from today?

3.John, an investment adviser, tells Lisa that if she's willing to invest the amount of $100 today, he can increase this investment by 4 times in 9 years. What annual rate of return is John promising on this investment?

4.AJ is saving for a trip for his family and as of today has accumulated $825 in a trip fund. AJ's goal is to accumulate $4125, or 5 times this amount to support the trip. Assuming that all of AJ's trip fund is invested to earn an interest rate of 9%, how long, in years and in fractions of a year, will it take AJ to achieve his goal?

5.Sanjay and Marissa Gupta have decided to begin a retirement savings program where they will contribute to an account that will accumulate tax free throughout their working lives. The couple expects to retire in exactly 37 years from today, and their goal is to have accumulated the amount of $650000 when they reach their future retirement age. In order to meet their goal, the couple will begin making contributions to a special account devoted to the retirement goal. Contributions to this account will begin one month from today, and the couple will continue placing equal monthly amounts into their retirement account for the next 37 years. What minimum amount needs to be placed in their account at the end of each month so that they'll reach their goal if the annual interest rate is 9%.

6.Consider a lottery that pays to the winner an annuity of $850 that begins immediately (an annuity due) and then annually in year 1 through year 24 with one exception. Because of high administrative costs associated with running the lottery, the payment in year 19, and only 19, is not $850 but $0. Using an interest rate of 6%, determine the present value of this cash flow stream.

7.Linus has just won the "Wait To Spend" lottery. Specifically Linus has won the lump sum amount of $1750 but he must wait until the end of 6 years to receive the money. Linus is in need of cash and would rather receive a different pattern of payments: $225 today and then receive some unknown LUMP SUM (i.e. one time) amount that will be received in 6 years. Using an interest rate of 6.50%, determine the unknown lump sum amount that would make the present value of both prizes equivalent.