Aaron wants to buy a Tesla Model S in three years. The current price of a Tesla Model S is $65,000. Aaron's investment account earns 6.5% interest annually, and it has a current balance of $50,000. Assume the annual inflation rate will be 2%. According to this information, which of these is closest to the price that Aaron will pay for his Tesla in three years (in Year-3-dollars)?

1 $73,988

2 $68,979

3 $78,517

4 $61,251

Consider the following cash flow streams. If the discount rate is positive, which of them has the highest present value (value at t=0)?

Year Stream A Stream B Stream C

1 100 100 0

2 0 0 100

3 0 100 0

4 100 0 100

5 0 100 100

6 100 0 0

1. The three streams have the same present value.
2. There is not enough information to answer the question.
3. Stream C
4. Stream B
5. Stream A