Assume that you are nearing graduation and have applied for a job with a local bank. As part of the banks evaluation process, you have been asked to take an examination that covers several financial analysis techniques. The first section of the test addresses discounted cash flow analysis. See how you would do by answering the following questions. I. Whats the difference between an ordinary annuity and an annuity due? What type of annuity is shown below? How would you change the time line to show the other type of annuity?

0 ------------1(100)---------2(100)-----------3(100)

II. Karim recently graduated and got his first real job. He decides to set up a retirement fund. He will deposit $2500 into this account at the beginning of each year from now until retirement. He will retire in 30 years. His retirement fund will earn 10% interest. How much will his retirement fund be worth when he retires? III. A car leased from bank on monthly installment costs $22,000. The balance will be paid off in 5 years payment at end of year each and with the interest of 18% per year on the unpaid balance. Find the amount of each payment?