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1. Find the present value of the following cash flow streams under the following conditions:

Year      Cash Flow X    Cash Flow Y
  1             $600              $200
  2              500                 300
  3              400                 400
  4              300                 500
  5              200                 600

a. The appropriate discount rate is 9%.

b. What is the value of each cash flow stream at a zero percent discount rate?

2. Nelson wants to buy a car that costs $35,000. He has arranged to borrow the total purchase price of the car from her credit union at 3 percent interest rate. The loan requires quarterly payments for a period of five years. If the first payment is due three months (one quarter) after purchasing the car, what will be the amount of Nelson's quarterly payment on the loan?

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