Using a financial calculator to complet those questions:
1. An investment offers the following cash flows: $577 one year from now, $571 two years from now, $240 in 3 years, $308 in 4 years, and $835 in 5 years. If the relevant interest rate is 6% per year (an APR, with interest compounded annually), how much is the investment worth in today's terms?
2. An investment offers the following cash flows: $714 today, $277 one year from now, $486 in 2 years, and $567 in 3 years. If the relevant interest rate is 7% per year (an APR, with interest compounded annually), what is the value of the investment 3 years from today (immediately after the cash flow at "year 3" occurs)?
3. You are taking out a car loan and will make payments of $343 each month (beginning one month from today), for a total of 60 monthly payments. If the interest rate on the loan is 1.13% (the effective monthly rate on this loan), how much are you borrowing to buy the car?
4. You will deposit $561 each year into an investment account that earns 7% interest (an APR, with interest compounded annually). Your first deposit will be exactly one year from today, and you'll make a total of 10 deposits. How much will be in your account 10 years from today?
5. An investment offers $497 per year forever, with the first payment occuring today. If the interest rate is 9.3% (per year, with annual interest compounding), the value of the entire investment today is $_____________.
6 . You have saved $6453 for a down payment on a new car. The monthly payment you can afford is $342. You will make payments for 48 months (starting 1 month from today). If the relevant interest rate is 0.72% per month (this is an Effective Monthly Rate), the price of the car you can afford (taking into account the down payment as well) is $_______________.
7. You will deposit $150 each of the next five years (the first deposit will occur one year from today, and there will be a total of 5 equal deposits) into an account that pays a 6.5% effective annual rate. Six years from today, you wish to have exactly $1000 in the account. You would need to deposit an additional $_______ into the account six years from today to meet that goal.