What is the most you should pay for an investment that will pay yon $1,000 a year forever if the required rate of return is 10%? You plan on retiring, at the end of forty years. You plan on making an equal deposit at the end of each year in an account earning 10%. You want to be accumulated enough money so that you can withdraw $500,000 at the end of each year for 25 years during retirement (the interest rate remains at 10%). How much do you need to deposit each year? When I retire in 30 years, I want to be able to endow a scholarship fund that pays DePaul $1,000,000 a year forever (starting the year after I retire). I want to set up a savings plan so that I save an amount each of the next 30 years (an annuity) to have enough for this endowment. If the interest rate is 10%, what amount must I save each year? What is the present value of the following cash flows if i = 10% Your broker offers you a real estate deal that will pay you rent of $4,000 this year and this amount will increase every year by 2%, if the discount rate is 12% what is the most you should pay for this investment? What is the present value of a perpetuity of $500 per year if the interest rate is 10%? Find the present value of the following cash flows at an interest rate of 8%. You plan on saving $5,000 a year for 40 years at which time you will retire. At the end of that year you want to take out equal installments over the next 20 years. If the interest rate is 10% what amount will you be able to withdraw every year