In order to get full credit, solutions must be clear and in detail. If you solve the questions using financial calculator, you should show all the steps on the calculator such as PMT = 600, I=10, FV=0, PV=?. If you prefer to use Excel, you should show the functions. For manual calculations, you should show the formula with plugged numbers.

1) The present value of $1,000 to be received in 7 years is ________ if the discount rate is 10.78%.

2) You have a son today and you deposit $10,000 in an investment account that earns 6% per year. The money in the account will be distributed to your son whenever the total reaches $1,300,000. How old will your son be when he gets the money (rounded to the nearest year)?

3) At what rate must $287.50 be compounded annually for it to grow to $650.01 in 15 years?

4) What is the present value of $11,363 to be received 7 years from today? Assume a discount rate of 3.9% compounded annually and round to the nearest $1.

5) How much money must be put into a bank account yielding 6.42% (compounded annually) in order to have $1,691 at the end of 11 years (round to nearest $1)?

6) John deposited $9,000 in a bank account, and 11 years later he closes out the account, which is worth $19,000. What annual rate of interest has he earned over the 11 years?

7) You borrow $50,000 and agree to pay it off with one lump sum payment of $60,000 in 6 years. What annual rate of interest will you be charged?

8) John borrowed $60,000 today that he must repay in 16 annual end-of-year installments of $5,000. What annual interest rate is John paying on his loan?

9) Assume you are to receive a 10-year annuity with annual payments of $1000. The first payment will be received at the end of Year 1, and the last payment will be received at the end of Year 10. You will invest each payment in an account that pays 9.5 percent compounded annually. Although the annuity payments stop at the end of year 10, you will not withdraw any money from the account until 25 years from today, and the account will continue to earn 9% for the entire 25-year period. What will be the value in your account at the end of Year 25 (rounded to the nearest dollar)?

10) You charged $1,000 on your credit card for Christmas presents. Your credit card company charges you 20% annual interest, compounded monthly. If you make the minimum payments of $30 per month, how long will it take (to the nearest month) to pay off your balance?

11) You decide to borrow $350,000 to build a new home. The bank charges an interest rate of 2.9% compounded monthly. If you pay back the loan over 30 years, what will your monthly payments be (rounded to the nearest dollar)?

12) JCT Auto Financial loans you $24,000 for four years to buy a car. The loan must be repaid in 48 equal monthly payments. The annual interest rate on the loan is 9 percent. What is the monthly payment?

13) If you wish to accumulate $250,000 in the child's college fund after 18 years, and can invest at a 9% annual rate, how much must you invest at the end of each year if the first deposit is made at the end of the first year?

14) You borrow $35,000 to buy a car, and agree to make 72monthly payments of $490 to repay the loan. What annual rate of interest, which is being compounded monthly, are you being charged?

15) Currently, 30-year and 15-year mortgage loans can be taken with 3% and 2.5% annual interest rates, respectively. If you want to purchase a $300,000 value house with a 5% downpayment. What would be your monthly payments for each mortgage loans; 30-year and 15-year mortgages?

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