1. A perpetuity will pay $60 beginning next year, growing thereafter by 1% per year. If the interest rate is 4.0%, what is the PV of the perpetuity?
2. An investment pays a rate of return of 0.2 in year 1, -0.2 in year 2, and 0.2 in year 3. What is the total rate of return over the three years?
3. If you borrow $103,847 for tuition, and repay $2,000 each month (beginning next month), how many months would you have to make payments if the interest rate is 6% annually?