1. Your company’s philanthropy initiative invested $ 50,000 in an account earning 7% per annum interest. The initiative added $ 30,000 to the account at the end of fifth year. How much money will the initiative have at the end of ten years from these investments?
2. You plan to develop a farmland for motel development. You believe that due to urbanization, the farm land will sell for $ 400,000 at the end of eight years. Your nominal cost of capital for such an investment is 6%. How much should you pay for the land today? Assume, for simplicity, annual compounding and that no other expenses or costs are involved.