Problem 9: Calculating Present Values. You need $40,000 in nine years. If you can earn .22% per month, how much will you have to deposit today? I will have to deposit $___________, today.

Problem 10: Calculating Present Values. You have decided that you want to be a millionaire when you retire in 32 years.

10a. If you can earn a 8% return, how much do you have to invest today? I have to invest $_________, today.

10b. If you can earn an 10% return, how much do you have to invest today? I have to invest $_________, today.

11. Present Value and Multiple Cash Flows

Investment X offers to pay you $2000 per year for ten years, whereas Investment Y offers to pay you $6,000 per year for five years. Which of these cash flow streams has the higher present value if the discount rate is 5 per cent? If the discount rate is 25 per cent?

1. PV of 2,000 for 10 years at 5% = $______________

2. PV of 6,000 for 5 years at 5% = $________________

3. PV of 2,000 for 10 years at 25% =$_______________

4. PV of 6,000 for 5 years at 25% = $_______________

12. Calculating Annuity Values

You want to have $75,000 in your savings account six years from now, and youre prepared to make equal annual deposits into the account at the end of each year. If the account pays 7.1 per cent interest, what amount must you deposit each year?

$____________________

13. Calculating Annuity Values

Vanzan Bank offers you a $61,000, nine year term loan at 13% annual interest. What will your annual loan payment be?

$_____________________