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1-Investment X offers to pay you $7,900 per year for 9 years, whereas Investment Y offers to pay you $10,800 per year for 5 years.

If the discount rate is 8 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	Present Value
Investment X	$
Investment Y	$

If the discount rate is 20 percent, what is the present value of these cash flows? (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

	Present Value
Investment X	$
Investment Y	$

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2-Booker, Inc., has identified an investment project with the following cash flows.

Year	Cash Flow
1		$	950
2			1,180
3			1,400
4			2,140

If the discount rate is 8 percent, what is the future value of these cash flows in Year 4? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value $ What is the future value at an interest rate of 11 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value $ What is the future value at an interest rate of 24 percent? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Future value $

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3- An investment offers $8,900 per year for 13 years, with the first payment occurring one year from now. Assume the required return is 9 percent. What is the value of the investment today? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What would the value be if the payments occurred for 38 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What would the value be if the payments occurred for 73 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $ What would the value be if the payments occurred forever? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

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4-For each of the following annuities, calculate the future value. (Do not round intermediate calculations and round your answers to 2 decimal places, e.g., 32.16.)

Future Value				Annual Payment			Years				Interest Rate
		$		$	1,460			10					7	%
					6,100			40					8
					3,500			9					5
					8,170			36					9

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5- Curlys Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $38,000 per year forever. A representative for Curlys tells you the policy costs $630,000. At what interest rate would this be a fair deal? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Interest rate %

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6-Bucher Credit Bank is offering 7.2 percent compounded daily on its savings accounts. Assume that you deposit $6,900 today. How much will you have in the account in 3 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Use 365 days in a year.) Future value $ How much will you have in the account in 6 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Use 365 days in a year.) Future value $ How much will you have in the account in 12 years? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16. Use 365 days in a year.) Future value $

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7- One of your customers is delinquent on his accounts payable balance. Youve mutually agreed to a repayment schedule of $590 per month. You will charge .99 percent per month interest on the overdue balance. If the current balance is $14,810, how long will it take for the account to be paid off? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Number of months

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8- Assume the appropriate discount rate for the following cash flows is 10.89 percent per year.

Year	Cash Flow
1	$	2,700
2		3,100
3		5,300
4		5,900

What is the present value of the cash flows? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

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9- You want to buy a new sports car from Muscle Motors for $43,800. The contract is in the form of a 60-month annuity due at an APR of 7.05 percent. What will your monthly payment be? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Monthly payment $

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10- You want to borrow $63,000 from your local bank to buy a new sailboat. You can afford to make monthly payments of $1,200, but no more.

Assuming monthly compounding, what is the highest rate you can afford on a 66-month APR loan? (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Highest rate %

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11- In 2015, a running back signed a contract worth $60.4 million. The contract called for $11.5 million immediately and a salary of $2.8 million in 2015, $8.1 million in 2016, $11.5 million in 2017, $8.7 million in 2018 and 2019, and $9.1 million in 2020.

If the appropriate interest rate is 10 percent, what kind of deal did the running back scamper off with? Assume all payments other than the first $11.5 million are paid at the end of the contract year. (Enter your answer in dollars, not millions of dollars, e.g., 1,234,567. Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Present value $

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12- You are planning your retirement in 10 years. You currently have $163,000 in a bond account and $603,000 in a stock account. You plan to add $7,700 per year at the end of each of the next 10 years to your bond account. The stock account will earn a return of 11.25 percent and the bond account will earn a return of 7.75 percent. When you retire, you plan to withdraw an equal amount for each of the next 22 years at the end of each year and have nothing left. Additionally, when you retire you will transfer your money to an account that earns 7 percent.

How much can you withdraw each year in your retirement? (Do not round intermediate calculations and round your answer to 2 decimal places, e.g., 32.16.) Annual withdrawal amount $