Chapter 6 For Questions 8, 9, 11, and 13 please write/type out the equation and solve it using either a calculator or Google Sheets/Excel. You can also use the Excel/Google Sheets built-in formulas (FV and PV) to check your answers - but don't rely solely on these built-in formulas. You may also draw timelines if they help you. 8. Each year $5,000 (5% of our annual pay) is deducted from our paychecks to go towards our retirement. If we get an annual rate of return of 4%, how much will our retirement account be worth in three vears? [101 9. A firm estimates that one of their investment projects will yield cash flows of $200, $400, $600, and $800 for the first year, second year, third year, and fourth year respectively. If the rate of return is 10%, what will the present value of these cash flows be? 1101 10. Define an annuity and name some examples. [101 11. An investment pays out $2,000 each year for 20 years and the current rate of return is 5%. What is the maximum amount we'd pay now for such an investment? Hint: if this qualifies as an annuity, we can use the annuity present value equation. [15/ 12 Define a perpetuity and name some examples. [107 13. You purchase a consol bond which promises a payment of $25 each year until forever. What is the present value of this bond if the prevailing interest rate is 5%? [5]