4. Joe expects to receive $8,000 each year for the next 10 years beginning one year from
today. If he deposits each payment into an account earning 8% interest annually, what
will be the balance of the account when the last payment is deposited?
5. Joe hopes to accumulate $250,000 with 10 annual deposits into a savings account earning
6% interest annually. What amount must Joe deposit each year to achieve his objective?
6. Sam and Sue purchase a $200,000 house using a down payment of $30,000 and a fixed
rate mortgage for $170,000. The annual interest rate on the loan is 5% and the term is 30
years. What monthly payment is necessary to amortize this loan?
7. Rich Dad is considering purchasing a small retail property at a price of $840,000. Rich
Dad has established a required rate of return of 14%. Based on the following cash flow
forecast, what is the NPV of this investment opportunity? Cash flows: year 1 = 100,000;
year 2 = 120,000; year 3 = 110,000; year 4 = 140,000; year 5 = 950,000. Should Rich
Dad purchase this property?