1. Sharon smith will receive $1,000,000 in 50 years. The discount rate is 14%. As an alternative, she can receive $1000 today. Which one should she choose?

2. Amber Corp. Expects to receive $2000 per year for 10 years starting one year from now, and $3500 per year for the next 10 years at the end of each year. What is the approximate present value of this 20 year cash-flow? Use an 11% discount rate.
a. $19,034
b. $27,870
c. $32,239
d. None of these options.

3. Dave wants to build a house in 8 years. He estimates that the total cost will be $150,000. If he can put aside $10000 at the end of each year, what rate of return must he earn in order to have the amount needed?
a. between 17% and 18%
b. Between 15% and 16%
c. 12%
d. None of these

4. Joe Chang has $210,000 and wants to retire. What approximate return must his money earn so he may receive annual benefits of $30,000 for the next 10 years?
a. 12%
b. between 12% and 13%
c. About 7%
d. Greater than 15%

5. John borrowed $150,000 to buy a house. His loan cost was 6% and he promised to repay the loan in 15 equal payments. How much are the annual payments?

6. Dan would like to save $1,500,000 by the time he retires in 25 years and believes he can earn an annual return of 8%. How much does he need to invest in each of the following years to achieve his goal?

7. Luke believes that he can invest $5,000 per year for his retirement in 30 years. How much will he have available for retirement if he can earn 8% on his investment and begins investing one year from now?

8. Ian would like to save $2,000,000 by the time he retires in 40 years. If he believes that he can achieve a 7% rate of return, how much does he need to deposit each year, starting one year from now to achieve his goal?