1. An investment will provide a cash flow to you of $10,000/year for 5 years, beginning 13 years from today. If the discount rate is 12%, then how much is the investment worth today? Show how to find PV of annuity.
2. A 13-year annuity pays $3,200 per month, and payments are made at the end of each month. The interest rate is 11 percent compounded monthly for the first six years, and 9 percent compounded monthly thereafter.
What is the present value of the annuity?