1. You sold your motorcycle and accepted a note with the following cash flow stream as your payment. It pays you nothing now, $1000 nezt year, and $2000 for the three years after that (Years 2-4). What was the effective price you received for the car assuming an interest rate of 6.0%?
2. You have just won the lottery and will receive $1,000,000 in one year. You will receive payments for 25 years and the payments will increase by 2.9 percent per year. If the appropriate discount rate is 6.9 percent, what is the present value of your winnings?