Question 1
Your father is about to retire, and he wants to buy an annuity that will provide him with $50,000 of income per year for 20 years, beginning a year from today. The going rate on such annuities is 6%. How much would it cost him to buy such an annuity today.
Question 2
Suppose you borrowed $25,000 at a rate of 8% and must repay it in 4 equal installments at the end of each of the next 4 years. How large would your payments be
