1. You plan on taking an Asian vacation 5 years from today. The vacation is estimated to cost $7,800 at the time of traveling, and you have decided to invest in an investment instrument that pays 6.8 percent per year, to fund it. How much should you invest today to achieve your objective?
2. You have just won a state lottery! You have the option of receiving equal annual payments of $165,000 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 $1.9 million today, should you accept it?