1. You are saving for a new car and will salve 4,000 every year (starting at the end of this year) for five years, investing the money in an account that return 6% per year. How much will you have on the day of your last investment?
2. Assume annual rate. 4 year rates are 5% and 7 year rates are 6%. your neighbor offers to lend or borrow money to/from you for 3 years beginning in 4 years at a rate of 7%. what should you do?
3. What is the discount factor that is equivalent to a 6% discount rate?
The discount factor is________ (four decimal points)