4. The market for classic cars has a historic rate of return of 3.5%. If you purchase a Model T today for $9,000, what do you expect to sell it for in 7 years, assuming the rate of return matches the historical one?

5. A lottery payout is 20,000 per year for the next 20 years, and the first payment is in 1 year. The appropriate discount rate is 5%. What is the value of winning the lottery today? What is the value of the lottery winnings in year 20?

6. You are purchasing an annuity that will pay you 15,000 a year for 5 years, beginning in year 20. The rate of return on the annuity is 3.5%. What are you going to pay for the annuity today?

7. You are purchasing a car from your grandparents. You agree to pay them $2000 today and $2000 per year for the next 3 years. If the Kelly Blue Book value of the car is $7,200, what is the implied interest rate you are paying your grandparents?

8. You commit to save 10,000 per year to pay for an MBA which will cost 65,000. In how many years can you start your graduate work, if you earn 8.5% on your investment?