Please answer the questions with steps describing the answer.

Chapter 5 (Introduction to Valuation: The Time Value of Money) 1. Simple Interest versus Compound Interest (101) Bank of Vancouver pays 7% simple interest on its savings account balances. Whereas Batik of Calgary pays 7% interest compounded annually. If you made a $6,000 deposit in each bank, how much more money would you earn from your Bank of Calgary account at the end of 9 years? 5. Calculating Interest Rates (L03) Assume the total cost of a university education will be $300000 when your child enters university in 18 years. You currently have 9565.000 to invest. What annual rate of interest must you earn on your investment to cover the cost ofyou r child's university education? 7. Calculating the Number of Periods (L03) At 6.5% interest. how long does it take to double your money? To quadruple it? 10. Calculating Present Values (L02) Normandin Inc. has an unfunded pension liability of $5?5 million that must be Page 168 paid in 20 years. To assess the value of the rm's stock. nancial analysts want to discount this liability back to the present. Ifthe relevant discount rate is 6,8911. what is the present value ofthis liability? 12.. Calculating Future Values (L01) Your coin collection contains fty 195.2 silver dollars. If yottr grandparents purchased them for their face value when they were new. how much will your collection be worth when you retire in 2060. assuming they appreciate at a 4.1% annual rate? 1?. Calculating Rates of Return (L03) The "Brasher doubloon." which was featured in the plot of the Raymond W Chandler novel The High Wimtmr, was sold at auction in 2014 for $4.582,500. The coin had a face value of$15 -. when it was rst issued in 1787 and had been previously sold for $430000 in 1979. At what annual rate did the coin appreciate front its minting to the 1919 sale? What animal rate did the 1979 buyer earn on his purchase? At what annual rate did the coin appreciate from its minting to the 2014 sale? 18. Calculating Present Values (L02) Suppose you are still committed to owning a $190,000 BMW (see Question 9). If you believe your mutual fund can achieve a 12% annual rate of return and you warn to buy the car in nine years on the day you turn 30. how much must you invest today? 20. Calculating Future Values (L01) You are scheduled to receive $15000 in two years. When you receive it. you will invest it for six more years at 7.1% per year. How much will you have in eight years? 21. Calculating the Ntunber of Periods (L03) You expect to receive $10000 at graduation in two years. You plan on investing it at 11% until you have $75000. How long will you wait from now? Chapter 6 (Discounted Cash Flow Valuation) 2. Present Value and Multiple Cash Flows (LO1) Investment X offers to pay you $6,000 per year for nine years, whereas Investment Y offers to pay you $8,000 per year for six years. Which of these cash flow streams has the higher present value if the discount rate is 5%? If the discount rate is 22%? 6. Calculating Annuity Values (LO1) Your company will generate $68,000 in annual revenue each year for the next seven years from a new information database. If the appropriate interest rate is 8.5%, what is the present value of the savings? 11. Calculating Perpetuity Values (LO1) The Sutherland Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $30,000 per year forever. If the required return on this investment is 5.8%, how much will you pay for the policy? 15. Calculating EAR (LO3) Royal Grandora Bank charges 13.2% compounded monthly on its business loans. First United Bank charges 13.5% compounded semiannually. As a potential borrower, which bank would you go to for a new loan? 27. Calculating Annuity Present Values (LO1) Beginning three months from now, you want to be able to withdraw $2,500 each quarter from your bank account to cover tuition expenses over the next four years. If the account pays .65% interest per quarter, how much do you need to have in your bank account today to meet your expense needs over the next four years? 33. Calculating Annuities (LO1) You are planning to save for retirement over the next 30 years. To do this, you will invest $800 a month in a stock account and $400 a month in a bond account. The return of the stock account is expected to be 10%, and the bond account will pay 6%. When you retire, you will combine your money into an account with a 9% return. How much can you withdraw each month from your account assuming a 25-year withdrawal period? Assume that the APR is compounded monthly