Assignment
1. Find the present value of the following cash flow streams under the following conditions:
Year Cash Flow X Cash Flow Y
1 $600 $200
2 500 300
3 400 400
4 300 500
5 200 600
a. The appropriate discount rate is 9%.
b. What is the value of each cash flow stream at a zero percent discount rate?
2. Nelson wants to buy a car that costs $35,000. He has arranged to borrow the total purchase price of the car from her credit union at 3 percent interest rate. The loan requires quarterly payments for a period of five years. If the first payment is due three months (one quarter) after purchasing the car, what will be the amount of Nelson's quarterly payment on the loan?