Itzak Perlman Corporation needs $15,000,000 in ten years to be able to retire bonds that will be maturing at that time. What amount must Perlman deposit into a bond sinking fund at the end of each year if the fund is expected to earn interest at a rate of 8% per year?

2. Igor Stravinsky is retiring today. His employer has given the option of taking a lump sum payout of his pension or receiving quarterly annuity payments for the next seven years. He could receive $950,000 today or receive $45,000 every three months for seven years, with the first payment received today. If money is worth 2% per quarter, compounded quarterly, which option would you recommend to Stravinsky?

3. Tchaikovsky Company purchased a custom-made grand piano on December 31, 2002. The purchase agreement stipulated that Tchaikovsky should pay $25,000 at the time of the purchase and $5,000 every six months for the next four years. The first of eight $5,000 payments would occur six months from today. Assuming an appropriate interest rate of 4% per year, what is the cost of the piano?