5.08

Shalit Corporation's 2011 sales were $5 million. Its 2006 sales were $2.5 million.

1. Atwhatratehavesalesbeengrowing?Roundyouranswertotwodecimalplaces.%

5.09

Find thefuture valuesof theseordinary annuities. Compounding occurs once a year. Round your answers to the nearest cent.

1. $800 per year for 4 years at 12%.$
2. $400 per year for 2 years at 6%.$
3. $700 per year for 6 years at 0%.$

Rework previous parts assuming that they are annuities due. Round your answers to the nearest cent.

$800 per year for 4 years at 12%.$ $400 per year for 2 years at 6%.$ $700peryearfor6yearsat0%.$5.10

Find thepresent valuesof theseordinary annuities. Discounting occurs once a year. Round your answers to the nearest cent.

1. $600 per year for 16 years at 6%.$
2. $300 per year for 8 years at 3%.$
3. $400 per year for 14 years at 0%.$

Rework previous parts assuming that they areannuities due. Round your answers to the nearest cent.

$600 per year for 16 years at 6%.$ $300 per year for 8 years at 3%.$ $400 per year for 14 years at 0%.$

5.11

Present value of a perpetuity

1. What is the present value of a $600 perpetuity if the interest rate is 6%? Round your answer to the nearest cent.$
2. Ifinterestratesdoubledto12%,whatwoulditspresentvaluebe?Roundyouranswertothenearestcent.$
4. 5.12

Uneven cash flow stream

1. Findthepresentvaluesofthefollowingcashflowstreamsat12%compoundedannually.Roundyouranswerstothenearestcent.

   0

   1

   2

   3

   4

   5

   StreamA	$0	$150	$400	$400	$400	$300
   StreamB	$0	$300	$400	$400	$400	$150

   StreamA$
2. StreamB$
3. WhatarethePVsofthestreamsat0%,compoundedannually?StreamA$StreamB$

5.13

You have saved $4,000 for a down payment on a new car. The largest monthly payment you can afford is $350. The loan will have a 12% APR based on end-of-month payments.

1. What is the most expensive car you could afford if you finance it for 48 months? Round your answer to the nearest cent.$
2. What is the most expensive car you could afford if you finance it for 60 months? Round your answer to the nearest cent.$