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What is the most would be willing to pay as a lump sum

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Problem 1: Charley wants to sell you an investment that will pay $1,000 per quarter for 25 years. You desire an annual rate of return of 5.5 percent, compounded quarterly. What is the most you would be willing to pay as a lump sum today for this investment?

A. $54,165.88

B. $57,082.94

C. $51,152.59

D. $212,232.81

E. $218,806.30

Problem 2: You have $100,000 saved today and plan to withdraw $8,000 a year. How long can you make these withdrawals if you earn an annual percentage rate of 3.5 percent?

A. 14.96 years

B. 15.48 years

C. 16.73 years

D. 18.08 years

E. 19.00 years

Reference no: EM132958144

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