4. You are offered an annuity investment that will pay you $15000 each year for the next 15 years, with the payments at the end of each year (first payment exactly one year from today at t=1). If you believe a discount rate of 5% is appropriate for the risk of this investment, what is the most you would be willing to pay for this investment today?

5. You are given a choice between receiving $100 now or $200 in 8 years. What would the discount rate have to be for you to be indifferent between the two options?

6. You are invited to make a venture capital investment in a new firm. The investment is forecasted to pay you $60,000 next year (t=1 on timeline), and all subsequent cash flows after next year are expected to grow at a constant 5% per year forever. If your discount rate is 10%, what is the most you would be willing to pay for this investment today?

7. You are given the following stream of cash flows:

Year 1 Year 2 Year 3 Year 4 Year 5 $100,000 $110,000 $120,000 $130,000 $140,000 A. If you thought the appropriate discount rate was 10%, what would be the present value of this cash flow stream today at t=0?

B. If you thought the appropriate interest/discount rate was 10%, what would be the future value of this cash flow stream in five years at t=5 years?

8. You are investing in your 401k retirement plan. You will rollover or invest $100,000 today into the account, and then invest $16,000 each year for the next 30 years. If your expected return is 9.0% each year, what will your account be worth at the end of 30 years.

9. You are thinking of purchasing a new car for a price of $25,000. If a credit union will finance the entire purchase (i.e., no downpayment) and is offering 5-year car loans at 4.8% APR, what will your monthly payments be on the car loan?

10. You are thinking of purchasing a new home for a price of $250,000. If a bank will finance 80% of the purchase price (i.e. you make a 20% down payment) and is offering 30-year fixed rate mortgage loans at 4.20% APR, what will your monthly payments be on the loan?