1. Jens just took out a loan from the bank for 21,586 dollars. He plans to repay this loan by making a special payment to the bank of 2,890 dollars in 3 years and by also making equal, regular annual payments of X for 11 years. If the interest rate on the loan is 8.72 percent per year and he makes his first regular annual payment in 1 year, then what is X, Jens’s regular annual payment?
2. An investment, which is worth 20,500 dollars and has an expected return of 9.83 percent, is expected to pay fixed annual cash flows for a given amount of time. The first annual cash flow is expected in 1 year from today and the last annual cash flow is expected in 9 years from today. What is the present value of the annual cash flow that is expected in 6 years from today?
3. Fatima wants to buy a boat that is available at two dealerships. The price of the boat is the same at both dealerships. Middlefield Motors would let her make quarterly payments of 2,680 dollars for 8 years at a quarterly interest rate of 3.97 percent. Her first payment to Middlefield Motors would be due in 3 months. If Fairfax Boats would let her make equal monthly payments for 2 years at a monthly interest rate of 0.77 percent and if her first payment to Fairfax Boats would be today, then how much would each monthly payment to Fairfax Boats be?