1. If $100 is placed in an account that earns a nominal (yearly) 4% compounded quarterly
   1. How much will it be worth in 5 years (what is the FV of the $100) and what is the effective annual rate in the question? (10 points)

2. You have just won the lottery. You can choose between receiving $750,000 today or an annual payment of $50,000 at the end of each of the next twenty years. The interest rate that makes you indifferent between the two is 2.91%. Without doing any calculations, explain which option you would take if the interest rate today was 5%. (10 points)

3. You are considering purchasing a new car for $45,000. You decide to pay $7000 in cash and borrow the remaining amount with a four year car loan with a nominal annual rate of 4.8%. What will be the size of your monthly payment on the loan? (10 points)