1. What is the present value of receiving $ 95.00 at the end of each year forever starting 6.0 years from now.

Assume the interest rate is 8.20% compounded annually.

2. Suppose a security is expected to produce end-of-year cash flows of $1,400.00 dollars starting 6.0 years from now and continuing until 37.0 years from now. What is the present value of this security? Use a discount rate of 16.00% compounded annually.

3. Suppose you want to buy a house that costs $100,000.00. The bank requires a 15.00% down payment and will charge 13.20% interest compounded monthly. Suppose you put down the least amount that you could and borrow the rest from the bank. If you made monthly payments to the bank for 20.0 years, how much would each payment be?

4. XYZ, Inc., just paid a dividend of $4.00. XYZ, Inc., is expected to increase their (year-end) dividend 6.00% each year forever. What should be the price of this stock assuming that the applicable discount rate is 16.00% compounded annually?

5. Judy and John wish to buy a house in the future. In order to get the favorable interest rate associated with at least a 20% down payment, they expect to need $30,000.00. Currently Judy and John have no money for a down payment. However, at the end of each month they plan to deposit a certain fixed amount into an account earning 9.00% interest compounded monthly. How much money must Judy and John save at the end of each month so they will have the necessary cash 5.0 years from now?