- You want to buy a new car when you graduate, and you expect that the car will cost $35,000. If your money market account earns a 3% APR compounded monthly, how much do you have to save today so that you can buy the car in two years?

- If you deposit $15,000 into a savings account today, how long will it take for the balance of the account to reach $30,000 if the account pays an APR of 4% with monthly compounding?

- Consider the above problem again: However, this time assume that you deposit $10,000 into the account today and also plan on making monthly deposits (at the end of each month). The APR is still 4% and interest is compounded monthly. How much must your deposit each month in order to build your account balance to $32,000 in four years?

- According to bank lending rules, you can afford at most a monthly mortgage payment of $1,100. What is the largest 30-year mortgage you can afford if the bank charges an APR of 5.2%?

- Imagine an annuity that pays $95 per year for 20 years. The catch is that the first payment occurs exactly 10 years from today. Using a discount rate of 8%, what is the present value (as of today) of this set of cash flows?

- If you can earn 9% on your savings account, which of the following investments is worth the most to you? (1) $10,000 in 8 years; (2) $20,000 in 15years; (3) A 10-year ordinary annuity offering $900 payments; (4) A 25-year annuity due offering $500 payments.

- You walk into a car dealership and pick up a sweet new 2016 Acura TSX. The car is valued at $29,890 today. The salesman tells you that they are running a special interest rate, and that if you put down $9,000, your monthly payments (for five years) will be $367.04. What is the APR associated with the special interest rate that is being offered to you?

- TV newsman Kent Brockman would like to slide behind the wheel of a new Lexus automobile, but finds that a new one is a little beyond his means. He hears that Lexus is providing 4.9% APR financing for 66 months for certified pre-owned Lexus automobiles. Kent finds a pre-owned Lexus that he likes for $35,000 and has $5,500 for a down payment. What will Kents monthly car payment be if he buys this Lexus and takes advantage of the 66-month, 4.9% APR financing offer?

- A father is planning for his son (currently five years old) to attend college in 13 years. The father expects that his sons tuition will be $35,000 per year for four years. The father can only save $2,900 per year (beginning today) for 13 years in a savings account that earns 10% annually. A financial advisor warns the father that these deposits will not be enough to fully fund his sons expected tuition expense. Assuming the son will make 4 equal withdrawals from the college fund beginning at age 18, how much in additional college funds will the son need to come up with each year?

- Mayor Diamond Joe Quimby is planning on retiring in 15 years and has begun the necessary planning. Given his lifestyle of excesses, he estimates that he will need $500,000 per year to maintain his current level of comfort. However, also due to his lifestyle of excesses, he will live for only ten years after the date he retires. Assume that Mayor Quimby will take his retirement income payment at the beginning of the year, and will make 15 deposits (beginning one year from now) into his saving account. If Mayor Quimby can invest money at 13%, how much must he embezzle and deposit each year in order to have the money required to fund his 10 retirement income payments?