3.

Find the future values of these ordinary annuities. Compounding occurs once a year. Do not round intermediate calculations. Round your answers to the nearest cent.

$900 per year for 16 years at 16%.

$

$450 per year for 8 years at 8%.

$

$700 per year for 8 years at 0%.

$

Rework parts a, b, and c assuming they are annuities due.

Future value of $900 per year for 16 years at 16%: $

Future value of $450 per year for 8 years at 8%: $

Future value of $700 per year for 8 years at 0%: $

4.Problem 5.12 (Effective Rate of Interest)_

Find the interest rates earned on each of the following. Round your answers to the nearest whole number.

You borrow $700 and promise to pay back $735 at the end of 1 year.

%

You lend $700 and the borrower promises to pay you $735 at the end of 1 year.

%

You borrow $79,000 and promise to pay back $432,412 at the end of 15 years.

%

You borrow $8,000 and promise to make payments of $2,219.30 at the end of each year for 5 years.

%

5. Problem 6.09 (Expected Interest Rate)

The real risk-free rate is 2.65%. Inflation is expected to be 3.65% this year, 5.15% next year, and 2.3% thereafter. The maturity risk premium is estimated to be 0.05 (t - 1)%, where t = number of years to maturity. What is the yield on a 7-year Treasury note? Do not round intermediate calculations. Round your answer to two decimal places.

%