1. Richard Stokes borrows $75,000 to buy new equipment for his factory. Its a 3 year loan with 9 percent interest and will be paid with fixed annual payments. Prepare an amortization table. Show all of your calculations.

2. Investment A offers you a payment of $5,500 for 9 years and investment B offers $8,000 for 5 years. If the interest rate is i. 6% ii. 22% Calculate and compare the PV of each investment.

3. An investment has the following cash flows. Calculate the Future values at the end of fourth year if the discount rate is i. 8% ii. 11% iii. 24%

Cash flows Year 1 700 Year 2 900 Year 3 1400 Year 4 2000

4. An investment offers $7000 per year for 15 years with the first payment occurring one year from now. The required rate of return is 9% i.what is the value of investment with payments for 15 years? ii. What is the value of investment if payments occur for 40 years? iii. What is the value of investment if payments occur forever?

5. Mr Ben makes an investment of $20000 and he is paid fixed amounts annually for twelve years. The required rate of return is 8.5%. Calculate the amount of annual payments. ii. calculate the amount of fixed payments if they are paid semiannually.

6. Calculate the EAR for the following cases: APR Number of times Compounded 9% quarterly 13% monthly 16% daily 19% semiannually

7. You want to buy a new boat for $69500. The bank accepted to offer you a loan with APR of 8.6%. The payments will be made monthly for 5 years. i. What will be the monthly payments? ii. Calculate the EAR

8. XYZ corporation has 9 percent coupon rate. It has 8 years to maturity. It makes annual payments and have a par value of $1000. If the YTM on these bonds is 7% what is the bonds price?

9. Calculate the coupon rate for the bond if the bond has 16 years to maturity a par value of $1000 and makes annual coupon payments. The price of the bond is $1051

10. AVC company issued a 15 year bond one year ago at a coupon rate of 8.5 %. The bond makes semiannual payments if YTM is 7.90% par value is $1000 . What is the current dollar price?