1. You've recently been accepted into a one year Masters program. Since you had outstanding credentials, the department has offered you a graduate assistantship which includes a one-time tuition waiver of $25,000 at the beginning of the academic year plus an end of the month stipend for 12 months. Anheuser Busch, which recently started a center at the Research Park has also offered you a contract for 1 year as a part-time intern paying $3,500 per month. What monthly stipend would make you indifferent to these two offers, if the rate of interest is 6% compounded monthly.
a. $1,348.33
b. $1,721.67
c. $1,868.63
d. $1,305.53
e. $1,468.21
2. Kathy will receive 6,350 at the end of his year, 7,280 at the end of next year and 8,470 at the end of the following year. What is the future value of these cash flows at the end of year 3 if the interest rate is 8%?
a. 18,845
b. 19,542
c. 22,008
d. 23,739
e. 24,612