2. Suppose there is an investment project with the following cash flows to be received at the end of next three years. The interest rate is 8 percent. a. What is the value of these cash flows at the end of Year 3 ? (3 marks) b. What is the value of these cash flows today (today is Year 0 )? (3 marks) 3. You need $400,000 for a new house in 6 years. If you could earn 1.5% per month, how much will you have to deposit today? ( 3 marks) 4. At 6% interest rate compounded monthly, how many years does it take to triple your money? (3 marks) 5. An investment guarantees that you can receive back $30,000 six years later by investing $10,000 today. What interest rate do you earn if the rate is compounded semi-annually? ( 3 marks) 6. BEE Bank is newly established and offers savings deposits rate of 8% compounded quarterly. If you deposit $40,000 into that account, how many years will you have to wait until your account is worth $60,000 ? ( 3 marks) 7. Suppose you need to borrow $20,000 to take a vacation trip to Osaka. The bank offers a 36 -month instalment plan with an interest rate of 6% per year. How much would your monthly payment be? ( 3 marks) 8. An insurance company is selling a perpetual annuity contract that pays $3,000 monthly. The contract sells for $200,000. What is the monthly return on this investment vehicle? (3 marks) 9. What is the present value of an annuity that pays ten annual cash flows of $3,000 each, beginning in 3 years? Assume that the appropriate discount rate is 5%. ( 6 marks)