1. What is the present value of the following payment stream at an interest rate of 7%; $1000 today, $2000 at the end of year 1, $5000 at the end of year 3, $6000 at the end of year 5.

P: Present value

CF: Cash Flow

YTM: Yield to Maturity @ one type of interest rate

2. What is the present value of perpetuity of $1000 per annum starting immediately offering a 12% interest rate?

PV perpetuity = FV / i

3. What is the APR on a 48-month loan on an $18,000 car, if you put $3000 down payment and the monthly payments are $373.28

m   = number of payments in a year

c    = annual interest cost

N   = total number of payments

P    = principal of the loan

Loan Borrowed = ??