Don Draper has signed a contract that will pay him $100,000 at the beginning of each year for the next 6 years, plus an additional $200,000 at the end of year 6. If 5% is the discount rate, what is the present value of Don's contract? Ans.: ________.

A. 682,191

B. 690,696

C. 628,191

D. 701,123

You see the following quote in an invoice: 2/10, net 30. What is the effective annual rate (EAR) for giving up the cash discount? (Hint: use 365-day convention) Ans.: ________%

• A. 44.59
• B. 40.75
• C. 36.50
• D. 45.75