1. Mary decided to support Purdue University's Cycle Giving Circle with a gift of $10,000 per year forever. If Purdue earns 6% per year on its investments and if the first Cycle Giving Circle is in a year's time, how much will Mary need to donate?
2. Suppose you have a real estate opportunity that requires $100,000 investment today but will pay you $250,000 in 8 years. What interest rate, r, would you need so that the present value of what you get is equal to the present value of what you give up?