5. You are thinking of buying some land but arent sure what you are going to do with the land in the future. You think the land should be worth $300,000 in 20 years. What would be the present value of the investment? There arent going to be any other cash inflows or outflows. You would expect to earn 12% annually on the investment.

6. How much would you pay right now to get $100 at the end of 10 years if you can earn 6% interest on another investment of a similar risk?

7. You own a condo building and you think that youll have to do maintenance of painting and new carpeting at the end of three years that will amount to $20,000 and then at the end of six years you must spend another $25,000. What is the present value of this maintenance if you figure these expenditures would have a 7 percent annual rate of return?