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1. You can purchase a fifteen-year annuity, that pays $26,500 a year. The first payment starts...

1. You can purchase a fifteen-year annuity, that pays $26,500 a year. The first payment starts nine years from today. What is a fair market price today if your opportunity cost of investment is 5%?

2. Another bank will let you borrow the $20,000 for your new car. You can still borrow at 7% per year. If you take the 3-year loan, what are your monthly payment?

3. Suppose you borrow $35,000 and you are going to make annual payments of $3,000 for nine years. What interest rate are you paying on the loan?

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