1. How much will you pay someone today in order to receive $6,000 each year for the next 10 years? Your opportunity cost of capital is 7%, show work.
2. Would you pay someone $500 today to get $600 in five years if your opportunity cost of capital is 7% (opportunity cost of capital is the rate you expect to make) show your work.
3. John plans to buy a vacation home in 7 years from now and wants to have saved $87,902 for a down payment. How much money should he place today in a saving account that earns 4.21 percent per year (compounded daily) to accumulate money for his down payment?