1.You decide that you need $60,000 in 4.5 years in order to make a down payment on a house. You plan to make semi-annual deposits to achieve your goal. If interest rate is 8%, how much should be deposited each time?

2.You owe $25,000 to your parents for funding some of your college. You promise to make 5 annual payments of $6,750 to settle your debt. Approximately what interest rate are your parents charging, if you make the 5 payments beginning one year from now?

3.You are offered an investment that will pay $24,000 per year for 7 years. If you feel that the appropriate discount rate is 11%, what is the investment worth to you today?

4.You have a rich uncle who has offered you some money upon successfully completing your accounting course. Assuming an annual interest rate of 8%, which alternative should you choose? Show your work for each alternative

a.$30,000 now

b.$6,000 a year for 6 years, with the first payment at the end of the first year

c.$4,000 a year for 5 years with the first payment made at the end of year 1, and then $19,000 at the end of the 6th year.