How much should you invest each year

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1. Someone offers you a security that pays $1,000 each year for 27 years with the first payment made three years from today. How much are you willing to pay for the security if your required rate of return is 8%?

2. You are saving for your child’s college education. You will need tuition, which will be $30,000 each year for 4 years, with the first tuition payment due 10 years from today. You decide to make 10 equal payments into a bank account that earns 5% per year beginning one year from today. How much should you invest each year?

Reference no: EM131989835

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