5.You decide that you need $88,000 in 10 years in order to makea down payment on a house. You plan to make annual deposits toachieve your goal. If interest rate is 8%, how much should bedeposited each time? Hint use the Financial Function “PMT” to solvefor the payment and PV will be zero.

6. You owe $46,000 to your parents for funding some of yourcollege. You promise to make 8 annual payments of $8,000 to settleyour debt. Approximately what interest rate are your parentscharging (estimated up to 2 decimal places), if you make the 8annual payments beginning one year from now? Hint use the FinancialFunction “RATE”. Note if you need help use the “Help on thisfunction” feature. This help will include an example for you tofollow.

7. You are offered an investment that will pay $36,300 per yearfor 9 years. If you feel that the appropriate discount rate is 7%,what is the investment worth to you today?

8. Your grandparents offered you some money. You are offered thefollowing options. Assuming an annual interest rate of 5.0%, whichoption should you choose?

Show your work for each alternative

a. Receive $20,000 immediately

b. Receive $3,200 at the end of each six months for four years.You will receive the first check in six months

c. Receive $2,900 at the end of each year for four years, andthen $20,000 at the end of the fifth year.