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How much can you borrow today

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Question 1 - Tom was injured and disabled at work. The insurance company is currently paying him $75,000 per year. This will continue for 40 years. If the insurance company offers Tom a single amount today, in exchange for eliminating the annual payments, how much should Tom ask for (today)? Assume an interest rate of 8%.

Question 2 - You can afford a loan payment of $800 per MONTH on a house. The loan is for 30 years. The rate is 5% annually. How much can you borrow today?

Reference no: EM133113242

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