What is the present value of $30,000 you will receive 7 years in the future, assuming a 3% interest rate:

 

2. If you saved $5,000 per year (at the end of each year) for 10 years in an account with a 4% interest rate, how much money would you have in that account at the end of 10 years?

 

3. Calculate the discount factor you would use to find the present value of an amount of money you will receive 8 years in the future, assuming a 3% interest rate.

 

4. You are considering purchasing an annuity that would pay you $1,000 per year for 10 years. The interest rate is 5%. Out of the choices below, what would be an reasonable price to pay for that annuity?

 

5. Imagine you have a credit card balance of $1,000 that you would like to pay off within one year. The annual interest rate on that credit card is 16%, but interest compounds monthly, and you are required to make a payment each month. 

What amount would you have to pay monthly to pay off this balance within one year?