Problem:
Suppose you just bought a 20-year annuity of $7,500 per year at the current interest rate of 10 percent per year.
Required:
Question 1: What is the value of your annuity today?
Question 2: What happens to the value of your investment if interest rates suddenly drop to 5 percent?
Question 3: What if interest rates suddenly rise to 15 percent?
Please describe in detail and show all techniques