***PLEASE ANSWER ALL QUESTIONS***

1. Calculate the future value of $1,000 in 10 years assuming an interest rate of 12% (APR) compounded quarterly.

Also calculate the effective annual rate (EAR) on the investment.

2. Mr. Wise is retiring in 25 years. He would like to accumulate $1,000,000 for his retirement fund by then. He plans make equal monthly payments to achieve his goal. If the rate of return on the retirement fund is 12% (APR), what will his monthly payments be?

3. Mr. Wise makes payments (as per problem 8) for the first ten years and stops making payments afterwards due personal problems. How much would he have accumulated at the time of retirement assuming that the accumulated amount keeps on earning interest at the stated rate on a monthly basis?

4. Mr. Spend has accumulated credit card loans of $15,000 and is finding it difficult to make payments. His local bank has offered him a consolidation loan to payoff all the credit card loans. The loan calls for monthly payments for 10 years and has a nominal interest rate of 5.99% (APR). What will Mr. Spend's monthly payments be if he takes the loan?

Credit Card	Loan Amount	Monthly Payment
Visa 1	$3,000	$90
Visa2	$5,000	$120
Visa 3	$6,000	$150
Master Card 1	$1,000	$20

5. Mr. Carter is planning to buy a home and he expects to borrow $200,000 for that purpose. Currently

15-year mortgage loans are quoted at 5% (APR). He expects to make monthly payments towards the loan. Calculate his monthly payments.

What will be the outstanding amount on the loan after making payments for 5 years?

6. Given the following data, calculate the present value of the cash flows (ordinary annuity) in each case. Also calculate the present value of the cash flows (annuity due) in each case

Payment	Years	Interest Rate	Present Value
$500	10	6%
$1,200	20	7.5%
$2,500	12	12%
$750	7	10%

7. Given the following data, calculate the future value of the cash flows (ordinary annuity) in each case. Also calculate the future value of the cash flows (annuity due) in each case.

Payment	Years	Interest Rate	Future Value
$500	10	6%	?
$1,200	20	7.5%	?
$2,500	12	12%	?
$750	7	10%	?

8. Chuck's new car will cost $20,000. How much will his monthly car payments be if gets a loan for 60 months, and the nominal interest rate is 7% per year.

9. In order to start a new business, Miss Sue Me intends to borrow $50,000 from a local bank. The loan contract requires her to repay the loan in five equal installments of $13,870 at the end of each year. Calculate the annual interest rate on the loan.