1 A lottery will pay $8,500,000 per year for 20 years. What is the present

value of this prize is the interest rate is 4.8%?

2 What is the monthly payment on a mortgage if you borrow $350,000 at

3.5% for 30 years?

3 Five years from now you will get a $7,500 payment. Once they start,

you will get these payments forever. If you can earn 8%, what is the PV

of these payments?

4

You want to initially fund a scholarship for $20,000. You want to ensure

that that it keeps up with 4% tuition growth. You want to fund this

scholarship forever. If you can earn 7% on invested capital, how much

do you need to donate to fund this scholarship?