TIPS:

• Evaluate your result from a commonsense perspective
• Remember to check BGN v. END (annuities)
• The order in which you enter variables doesnt matter
• Must enter 4 variables to solve for 5^th (even if a certain variable is entered as 0)

1. If you are a mortgage lender, what is the most you are willing to lend a borrower TODAY in the following situation? The borrower has promised to pay you $8,000 at the end of each year for 12 years, and you want to earn a 9% annual rate of return.

1. How much will a $75 deposit made TODAY be worth in 15 years if interest is compounded annually at a rate of 12%?

1. If your house is worth $425,000 TODAY and it appreciates 3% annually, how much is your house worth in 25 years?

1. You are about to sign a seven-year lease for $38,000 per year for a commercial space. What is the present value of your payments given you have a discount rate of 4% and your payments are due at the beginning of each year?