1. A twenty-year annuity, first payment of $3,000 immediately with payments increasing by 4% per year.

a) 50,368 b) 50,388 c) 50,375 d) 50,373 e) 50,371

2. A perpetuity starting with payments of $1000 per year in one year and increasing by $50/year i=6%

a) 30556 b)30558 c)30554 d) 30455 e) 30655

3. A perpetuity starting with payments of $35000 in one year and increasing by 3.5% per year i=6%

a)1,400,000 b)1,399,900 c)1,399,950 d)1,4000,500 e)1,400,100

4. Last year, BT Motors rated BBB+ issued a 10-year bonds with a 9 percent coupon. What is the market price of the BT Motors' bond if the yield to maturity currently is 8.9 percent and the current inflation rate is 1.825%?