John West is 40 years old. He is a young executive and his salary is $1 mil a year. His income is expected to grow at 10% for every year he works. John wants to retire at 55 and he wants to save 20% of his salary every year. John can invest at 7%.

What is the present value of John's savings?

. If the rate of discount is 20 percent,
a) Would you rather receive $100 today or 120 in a year?
b) Would you rather receive $205 today or $240 in one year?
c) Would you rather receive $500 in one year of $610 in two years?