1. What constant payment for the next 10 years (starting 1 year from now, 10 payments) would be equivalent to receiving $900 every other year starting 10 years from now. Assume the annual cost of capital is 7%.
2. Suppose you own two assets with the following payouts. (1) $450 at the end of every year starting 1 year from now. The annual cost of capital for these cash flows is 13%. (2) $900 one year from now and a cash flow that is 3% larger than the prior cash flow every year thereafter. The annual cost of capital for these cash flows is 8%. What is the weighted average cost of capital of this two asset portfolio? (enter your answer as a percent, e.g. 2.51. Do not include the "%" sign).
3. Suppose that you will need to save $600000 over the next twenty years to retire comfortably. What constant annual payment (20 payments) will you need to make to save this amount if the you can earn 7% annually?