1. Derek has the opportunity to buy a money machine today. The money machine will pay Derek $12,229.00 exactly 20.00 years from today. Assuming that Derek believes the appropriate discount rate is 11.00%, how much is he willing to pay for this money machine?

2.Derek plans to buy a $29,356.00 car. The dealership offers zero percent financing for 60.00 months with the first payment due at signing (today). Derek would be willing to pay for the car in full today if the dealership offers him $____ cash back. He can borrow money from his bank at an interest rate of 4.80%.

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