C. CALCULATION SECTION

Instructions: In this section, please show all calculations. Partial credit will be given wherever possible, when your calculations are shown and they are completed correctly.

33. China Manufacturing Agents, Inc. is preparing a five-year plan. Today, sales are $1,750,000. If the growth rate in sales is projected to be 6 percent per year over the next five years, what will the dollar amount of sales be in year five?

34. Dan and Jia are newlyweds and have just purchased a condominium for $150,000. Since the condo is very small, they hope to move into a single-family house in 5 years. How much will their condo be worth in 5 years if inflation is expected to be 4 percent per year?

35. Calculate the value today at t = 0 of a $10,000 perpetuity at a 6 percent discount rate.

36. Bill plans to fund his individual retirement account (IRA) with the maximum contribution of $2,000 at the end of each year for the next 10 years. If Bill can earn 4 percent on his contributions, how much will he have at the end of the tenth year?