4. 

Pedro Gonzalez will invest

$5,000 at the beginning of each year for the next 9 years. The interest rate is

8 percent. What is the future value? 

Carol Thomas will pay out

$6,000 at the end of the year 2, $8,000 at the end of year 3, and receive

$10,000 at the end of year 4. With an interest rate of 13 percent, what is the

net value of the payments vs. receipts in today's dollars? 

1. Mr. Nailor invests $5,000

in a money market account at his local bank. He receives annual interest of 8%

for 7 years. How much return will his investment earn during this time

period? 

10. 

Joe Nautilus has $210,000

and wants to retire. What return must his money earn so he may receive annual

benefits of $30,000 for the next 10 years? 

John Doeber borrowed

$150,000 to buy a house. His loan cost was 6% and he promised to repay the loan

in 15 equal annual payments. What is the principal outstanding after the first

loan payment? 

6. 

Dr. J. wants to buy a Dell

computer which will cost $3,000 three years from today. He would like to set

aside an equal amount at the end of each year in order to accumulate the amount

needed. He can earn 8% annual return. How much should he set aside? 

 John Doeber borrowed

$150,000 to buy a house. His loan cost was 6% and he promised to repay the loan

in 15 equal annual payments. How much are the annual payments? 

5. 

Ambrin Corp. expects to

receive $2,000 per year for 10 years and $3,500 per year for the next 10 years.

What is the present value of this 20 year cash flow? Use an 11% discount

rate. 

8. 

Mike Carlson will receive

$12,000 a year from the end of the third year to the end of the 12th year . The discount rate is 10%. The present value today of this deferred

9. 

Mr. Darden is selling his

house for $200,000. He bought it for $164,000 ten years ago. What is the annual

return on his investment?