1. Your best friend won the state lottery and has offered to give you $11,900 in five years, after he has made his first million dollars. You figure that if you had the money today, you could invest it at 8 percent annual interest. What is the present value of your friend's future gift? (Round your final answer to 2 decimal places.)
2. In four years, you would like to buy a small cabin in the mountains. You estimate that the property will cost you $71,500 when you are ready to buy. How much money would you need to invest each year in an account bearing interest at the rate of 4 percent per year in order to accumulate the $71,500 purchase price? (Round your final answer to 2 decimal places.)
3. You have estimated that your educational expenses over the next four years will be $14,900 per year. How much money do you need in your account now in order to withdraw the required amount each year? Your account bears interest at 6 percent per year.