please help with number 1!

1Kila Comm 308 1. Problems on Time Value of Money and Interest Rates Fred and Wilma want to save money to provide for their retirement and for the education of their daughter Pebbles. Pebbles will need $25,000 annually for four years beginning 15 years from now. Fred and Wilma figure that they will both retire 30 years from now and would like to have $100,000 annually for 25 years (with the first withdrawal beginning one year after their retirement). Given an interest rate of 9%, how much must Fred and Wilma invest annually if they plan to begin making deposits in one year and will make 30 deposits in all? Sol. 89,565 2. Three years from now you will begin to receive cash flows of $75 per year. These cash flows will continue forever. If you determine that the appropriate discount rate is 8%, what is the present value of these cash flows? Sol. $804 3. Four years from now you will receive the first of seven annual $100 payments. The current interest rate is 7%, but by t=3, the rate will have risen to 8%. What is the present value of this cash stream? Sol. $425 4. 5. You are considering investing $674 in a 5-year annuity due. The rate of return you feel you should earn is 10%. What annual cash flow from the annuity due will provide you with the required return? Sol. $162 In three years you will pay the first of eight annual $100 payments. The current interest rate is 14%, but after 5 years (by t=5) the rate will have dropped to 8%. What is the total value of your payments at the end of 10 years? Sol. $1,092 Your brother-in-law borrowed $1,000 from you 10 years ago and then disappeared. Yesterday he ire to pay back the loan, including the accrued interest. Assuming 6