PLEASE SHOW ALL WORK. Thanks!

1. How much will you have when you retire if you save $8,000 each year for 45 years? Your average return will be 8%.
2. Would you rather get $20,000 today or $2,000 at the end of each year for 15 years? Your opportunity cost of capital is 8%.

3. Would you rather get $15,000 in 10 years or 1,000 at the end of each year for 10 years? Your opportunity cost of capital is 12%.

4. If you invest your money would you rather get 5% compounded quarterly or 5.10% compounded annually?

5. What is the effective annual interest rate of 8.25% compounded semiannually?

6. What would your car payment be if you purchased a $24,000 car, put 10% down and financed the balance at 5.25% for three years?
7. What would your house payment be if you purchased a $180,000 house, put 20% down and financed the balance at 3.75% for 30 years?
8. If you leave the Humane Society $25,000 how much can they spend each year forever? The HS can get a return of 4% on their investments.

9. If you would like to give a scholarship for $3,000 each year forever how much do you need to leave WCU? The investment will get a 5% return.