(1)Dave is 21 years old. He wants to retire at 65. Dave has a disposable income of $2,000/month. The pension fund Dave has chosen has an average annual return of 8%. A. If Dave contributes half of his disposable income to the account, what will it be worth at 65?

(2)Assume that your rich relative passes away, leaving you a life insurance policy worth $200,000. The insurance company also offers you an option to pay this $200,000 to the insurance company and receive $9,000/year for 25 years, with the first payment due today. Which option should you use?