1. You would like to establish a trust fund that would pay annual payments to your heirs of $104 thousand a year forever. You expect the trust fund to earn an average return of 7.57 percent. How much do you need to deposit into this trust fund today to achieve your goal?
2. You are thinking of investing in a project that will pay you $100,000 6 years from now, and another $100,000 12 years from now. You think the right discount rate for the project is 8%. What is the maximum you should be willing to pay for this investment?