Tutorial Question No. 1 - Ch 4 Prob 4 You have just received a windfall from an investment you made in a friend's business. She will be paying you $10000 at the end of this year, $20000 at the end of the following year, and $30000 at the end of the year after that (three years from today). The interest rate is 3.5% per year. a. What is the present value of your windfall? b. What is the future value of your windfall in three years (on the date of the last payment)? Tutorial Question No. 2 - Ch 4 Prob 9 The British government has a consol bond outstanding paying 100 per year forever. Assume the current interest rate is 4% per year. a. What is the value of the bond immediately after a payment is made? b. What is the value of the bond immediately before a payment is made? Tutorial Question No. 3 - Ch 4 Prob 12 Assume that your parents wanted to have $150,000 saved for university by your 18th birthday and they started saving on your first birthday. They saved the same amount each year on your birthday and earned 8% per year on their investments. 1. How much would they have to save each year to reach their goal? 2. If they think you will take four years instead of three to graduate and decide to have $200,000 saved just in case, how much more would they have to save each year to reach their new goal? Tutorial Question No. 4 - Ch 4 Prob 18 A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $1000. Each year after that, you will receive a payment on the anniversary of the last payment that is 8% larger than the last payment. This pattern of payments wiil go on forever. if the interest rate is 12% per year: a. What is today's value of the bequest? b. What is the value of the bequest immediately after the first payment is made? Tutorial Question No. 5 - Ch 4 Prob 27 You are thinking of purchasing a house. The house costs $400,000. You have $50,000 in cash that you can use as a down payment on the house, but you need to borrow the rest of the purchase price. The bank is offering a 30-year mortgage that requires annual payments and has an interest rate of 7% per year. What will your annual payment be if you sign up for this mortgage