1. I have a bond that will pay me S2000 every year for the next 30 years. My first payment will be a year from today. I expect inflation to average 3% over the next 30 years. My real ALARR is 10%. AVhat is the present worth of this bond?
2. Ken will receive a $15 000 annual payment from a family trust. This will continue until Ken is 30; he is now 20. Inflation averages 4%, and Ken's real ALARR is 8%. If the first payment is a year from now and a total of 10 payments are to be made, what is the present worth of his remaining income from the trust?