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5. You would like to go to Hawai at the end of this year and lie on the beach for 3 years before you start

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5. You would like to go to Hawai at the end of this year and lie on the beach for 3 years before you start your first job. You figure you will need $15,000 a year to support you with Blue Hawais and suntan lotion. If you can earn 12% return, how much money would you have to deposit into an account today? (Draw a time line and use both the formula and financial calculator methods) (7pts) At a rate of 12%, what is the present value of the following cash flow stream? so at Time 0; SO at the end of Year 1; $100 at the end of Year 2; $200 at the end of Year 3; and $300 at the end of Year 4; and $400 at the end of Year 5; and $500 at the end of Year 6; and $600 at the end of Year 7 ? (Draw a time line and use both the formula and financial calculator methods) (7pts) 6

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