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LS Problem 1. Your rich uncle has promised to pay you $30,000 when you graduate from college exactly 3 years from now. What is the present value of this amount if the interest rate is 6%? The PV of this amount is: LS Problem 2. You want to buy a new car when you finish graduate school exactly 6 years from now. You estimate that the car you want will cost about $40,000 at that time. If you can earn 4% per year on your savings, how much would you have to put in the bank today to have the necessary funds 6 years from now? You would have to deposit: LS Problem 3. You deposit $10,000 in the bank today. The bank will pay you 5% interest per year on your deposits. How much will you have in the bank 8 years from now? 8 years from now you will have: Annuity Problem 1. You expect to receive $1,200 per year for the next 9 years. If the interest rate is 12%, what is the present value of the annuity? PVFA PMT PV of the Annuity Annuity Problem 2. A bank has offered to sell you an annuity for $400,000. If you buy the annuity today, the bank will pay you $50,000 per year for the next 10 years. If you can earn 10% interest per year on your savings, is this a good deal? Why or why not? PVFA PMT PV of the Annuity Is this a good deal? Why or why not