1. What is the future value of a five year annuity due that promises to pay you 650 each year Assume that all payments are reinvested at 10 percent a year until Year 4?
2. Suppose the real rate is 3.85 percent and the inflation rate is 1.3 percent. What rate would you expect to see on a Treasury bill?
3. For the next 4 years you will get the following cash flow in the following order, $325 $275 $250 $150. If you assume that the interest rate is 5% (which means that after you get the money, it will be invested and you will get 5% interest from it), how much money will you have in 4 years?