P1 
a.This is an investment situation because the cash goes out before it
comes in.
b. NPV = 2000 + 1000(P/A, i, 5)  200(P/G, i, 5)
c. For i = .20
NPV = 2000 + 1000*2.9906  200*4.9061= 2000 + 2990.6  981.22 = 9.38
Since NPV > 0, the investment is acceptable.
d. At 0% interest, the present worth of the investment is the sum of the
cash flows. The annual worth is the present worth divided by 5.
The sum of the cash flows is 2000 + 1000 + 800 + 600 + 400 + 200 = 1000
The net annual worth is 1000/5 = 200 per year.

P2a 
NPW = 1500 + 900(P/A, i, 4)(P/F, i ,3) = 151.7, Reject

P2b 
NPW = 1500 + 900(A/F, i, 2)(P/A, i ,8)=69.7, Accept

P2c 
NPW = 1500 + 900(P/A, i, inf.)(P/F, i 6)=7.04, Accept

P3 
You should pay the present worth of the future payments.
PW = 150(P/A, 0.0175, 12) = 150*10.740 = 1611.
The remaining money is 20000  1611 = 18389
Invested at 1.75%% interest per month, this money will grow to
18389*(F/P, 0.0175, 12) = 18389*1.231 = 22636.859
Note that this is enough to make the same deal with your roommate and have
some left over.
