1. A married couple will buy a beach house once their savings equal $1,943,500.00. They have $903,000.00 at the moment and will invest the money in an account that earns 10.00% per year. How many years before they purchase the beach house?
2. A young graduate has been offered a time-share on a condo in Steamboat Springs, Colorado. To be a part owner, the graduate must pay $1,596.00 at the end of each year for the next 19.00 years. If the graduate’s discount rate is 7.00%, what is the cost of this opportunity in today’s dollars? In other words, what is the most the graduate should be willing to pay today instead of making payments?