1. Given an imterst rate of 1%, the future value of a lump sum invested today will always:
A. remain constant, regardless of the investment time period.
B. decrease if the investment time period is shortened.
C. decrease if the investment time period is lengthened.
D. be equal to $0
2. You have just won a state lottery! You have the option of receiving equal annual payments of $190,000 for 30 years, or a lump sum amount today. The acceptable interest rate is 5.6 percent. If the state offers you a one-time payment of $2.9 million today, should you accept it?
A. No, because today's value of the annual payments is $3,371,812
B. No, because today's value of the annual payments is greater than $2.9 million
C. Yes, because today's value of the annual payments is $5,700,000
D. Yes, because today's value of the annual payments is $2,731,177