1. Today, you borrowed $3,100 on your credit card to purchase some furniture. The interest rate is 12 percent, compounded monthly. How long will it take you to pay off this debt assuming that you do not charge anything else and make regular monthly payments of $100?
2. You have some property for sale and have received two offers. The first offer is for $65,000 today in cash. The second offer is the payment of $35,000 today and an additional $50,000 two years from today. If the applicable discount rate is 15 percent, which offer should you accept and why?
3. Karen needs $35,000 as a down payment for a house 8 years from now. She earns 3 percent on her savings. She can either deposit one lump sum today for this purpose or wait a year and deposit a lump sum. How much additional money must she deposit if she waits for one year rather than making the deposit today?