ZACK WHEAT SITUATIONS REQUIRING HIS ANALYSIS USING TIME VALUE OF MONEY CALCULATIONS (1) Zack owns stock that he purchased for $10 per share 5 years ago. Today, that same stock has a market value of $20 per share. What has been his average annual return on this stock over the five year period? (2) Zack is in the market to buy a house. The selling price of the house he wants is $120,000. He will make a down payment of 10% of the selling price today and finance the rest with a thirty year mortgage that bears an interest rate of 8.5% per year. If monthly payments are to be made at the beginning of each month for the thirty years, how much will his monthly house payment be? (3) Zack has just won the state lottery. The prize to be paid by the state amounts to $27 million in total and is to be paid out at the beginning of each year in equal annual installments over the next 20 years. If the first payment is made today, how much money must the state set aside today in order to pay Zack his prize? Assume the state can invest its funds at an annual return of 9%, compounded annually. (4) Zack has a son who wishes to attend college starting in September of the year 2021. It is estimated that the son will need $25,000 per year to pay for all of his college and college related expenses. The son will take four years to complete his education. If Zack can invest money at 10% per year, compounded annually, how much will he need to invest at the beginning of each year, starting in September of 2006, in order to have enough money for his son's education by September 2021? The funds will continue to earn interest until drawn out in the amount of $25,000 each year for the four years he attends college, even while he is attending college. REQUIRED: Use time value of money concepts to answer the above situations. Round all dollar answers to the nearest whole dollar, all interest rate calculations to two decimal places (four decimal places in all), and all other answers to two decimal places.

REQUIRED: Use time value of money concepts to answer the above situations. Round all dollar answers to the nearest whole dollar, all interest rate calculations to two decimal places (four decimal places in all), and all other answers to two decimal places