Using Microsoft Excel, demonstrate your understanding of the Time Value of Money concepts discussed in the text by answering the following questions. Upload your answer to canvas.

1. You graduate from school and get a job with an annual salary of $50,000. a. (1 point) Your boss calls you into the office and says she is happy with your performance and is going to give you a $1,000 raise. What percentage raise is this for you? b. (1 points) If the Inflation Rate is 2.0%, what is the actual amount of your raise?

2. (3 points) At your graduation, your parents give you a $2,000 graduation gift in cash. You decide to invest this money in a University Credit Union (UCU) Term Certificate and the current Rate is 2.80%. If you leave this money alone for 5 years and it compounds monthly, how much money do you have in this savings account after 5 years?

3. (3 points) You decide after graduation to start saving for your retirement. Even though it might be tough at first, you decide to invest $200 a month for 40 years. If you get 10% interest compounded monthly, how much will you have earned?

4. After graduation you decide to buy your first car. You decide you want to get a Kia because it has a 10 year/100,000 mile warranty. You buy a 2019 Kia Sorrento EX for $35,000 and finance the vehicle through University Credit Union (UCU). Today’s new car loans are 4.29%. a. (2 points) If you finance this car for 66 months, what is your monthly payment? b. (3 points) Create an amortization table showing monthly payment, monthly interest and monthly principle paid. After the first year (12 months), how much interest have you paid?

5. In order to diversify your investing strategy, after graduation you decide to also invest annually in Tesla, Inc. You decide to invest $300 every January 1st for 5 years in Tesla and then when you are ready, you will sell this stock and buy your first home. Date Amount Price 2015 300 240 2016 300 213 2017 300 316 2018 300 333 (1 point) If you sell all of your stock today and the share price is $286, how much money did you receive for the sale of that stock? (2 points) How much money do you Gain or Lose?

6. You decide you want to experiment a little with investing in bonds. Your grandma gives you $1,000 at graduation and you want to put it away in a safe place. You find a government bond to buy. a. (1 points) If the Annual Coupon Rate is 5%, what is your annual coupon payment? b. (3 points) If you assume that the annual discount rate is 4% compounded annually, how much is the bond worth today?