A bank is paying 7.5% APR on a CD. (Note: The convention when there are no periodic payments is to assume annual compounding, unless stated otherwise. Thus this is annual compounding.) If you put $2500 into an account, how much will the account be worth in 3 years?

3062.5

3105.74

2505.63

4375

insufficient information to compute

2. Your firm is concerned about a financial obligation of $5 million coming due in 6 years. If your firm could earn 6.5% APR on an investment, how much would your firm have to invest today to fund (finance) the future $5 million obligation? [In other words, what is the PV of $5 M due 6 years from now if the interest rate is 6.5%?]

7.296 M

0.833 M

1.950 M

3.427 M

insufficient information to compute

3. What is the PV of $500 per year for 8 years if the required return is 8.5% (assume the $500 payments come at the end of each of the next 8 years)?

3079.93

260.33

2819.59

3000.79

62.5

4. What is the FV at the end of year 6 of $1500 put in an account today if the return is 7% per year?

2251.10

2130.00

999.51

8149.32