You are considering an investment with a $3-$year time horizon. At the end of the first

year, you expect to receive a cash flow of $$5,000$ from this investment. During the

remaining two years, the cash flows are expected to grow by $5\%($each year$).$ If your

required rate of return is $10\%,$ what is the present value of this investment?

a$)$ $$15,762\mathrm{.}50$

$($b$)$ $$13,025\mathrm{.}92$

c$)$ $$17,337\mathrm{.}50$

d$)$ $$12,434\mathrm{.}26$

Tip: Practice how to use the cash flow register on the financial calculator. Remember to

always press "ENTER" after inputting the cash flows.

You want to buy a house in four years, and you are currently saving for the down

payment. You plan to save $$4,500$ at the end of the first year and you anticipate that

your savings will increase by $10\%$ every year, thereafter. The applicable interest rate

on your savings is $12\%$ compounded annually. How much will you have saved for a

down payment at the end of the fourth year? $($Tip: first figure out your cashflows on the

timeline.$)$

a$)$ $$24,619\mathrm{.}36$

b$)$ $$15,646\mathrm{.}05$

c$)$ $$20,884\mathrm{.}50$

d$)$ $$16,305\mathrm{.}27$