Your task this week is to teach Grammy and the board the time value of money and its related concepts. She would like you to address several specific questions to demonstrate the use of time value of money techniques
1. What is the present value of a $1,000 annuity for 10 years, with the first payment occurring at the end of year 10 (that is, ten $1,000 payments occurring at the end of year 10 through 19), given a discount rate of 10 percent?
2. Given a 10 percent discount rate, what is the present value of an perpetuity of $1,000 per year if the first payment does not begin until the end of year 10?