Question: You are saving $200 today. The compounding interest rate is 3%. What will your saving be after 8 years? A perpetuity of $1,000 per year

  1. You are saving $200 today. The compounding interest rate is 3%. What will your saving be after 8 years?

  1. A perpetuity of $1,000 per year beginning paying 3 years from todayoffers an 12% return. What is its present value?

  1. What is the present value of a 6-year annuity of $100 per year that makes its first payment 1-year from today if the discount rate is 9%?

  1. You are offered a deal for purchasing a vehicle that requires you to pay $200 per month for the first year and payments of $400 per month during the second year. The APR is still 12% and payments still begin in one month. What is the present value of this alternative 2-year loan?

  1. Stock A and stock B are in the same industry and are competitors to each other. Stock A has a dividend yield of 20%, and stock B has a dividend yield of 5%. Assume they are performing as well as each other, which one is undervalued?

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