Business & Finance; What’s the future value of a 7%, 5-year ordinary annuity that pays \$500 each year? If this was an annuity due, what would its future value be?

1)  (Present value of an uneven stream of payments)
You are given two investment alternatives to analyze. The cash flows from these investments are as follows:
Investment A:
Year 0 \$0
Year 1 \$10,000
Year 2 \$20,000
Year 3 \$30,000
Investment B
Year 0 \$1,000
Year 1 \$3,000
Year 2 \$10,000
Year 3 \$10,000
Year 4 \$40,000
Assuming a 20 percent discount rate, find the present value and future value of each investment?
2)  (Nonannual compounding using a calculator)
Frank is thinking about trading boats. He estimates he will still have to borrow \$35,000 to pay for his new boat. How large will Frank’s monthly boat loan payment be if he can get a 6-year loan from the university’s credit union at 5%?
3) Suppose you currently have \$5,000 in your savings account, and your bank pays interest at a rate of 0.75% per month.  If you make no further deposits or withdrawals, how much will you have in the account in 7 years?
4) You are looking to buy a car and can afford to pay \$450 per month.  If the interest rate on a car loan is 0.65% per month for a 60-month loan, what is the most expensive car you can afford to buy?
5) What’s the future value of a 7%, 5-year ordinary annuity that pays \$500 each year? If this was an annuity due, what would its future value be?

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