1. GPI has designed a new hands-free phone that can be plugged into your ear. The new gadget is now ready for production and development. The GPI telephone company estimates that the first annual cash flow of the telephone will be 200,000 euros per year, starting 2 years from today. Cash flow will increase by 5% forever. What is the present value of the phone if the rate of return is 10 percent?

2. The second year business student is going to have a good time in the future. She saved 180,000 two years ago, but because she is currently studying, she took a break from saving. She intends to continue her savings after one year (then she will complete her studies) and will then contribute 180,000 yen a year and increase that amount by 7% for each year. In total, she plans to save for 10 years and use the money to buy a house. It receives a return of 8% per year, how high will this amount be after 10 years.