1.Janeis27yearsoldandexpectstowork38moreyears.Hercurrentsalaryis$58,575, which she expects to grow at a constant rate of 4% per year. The discount rate is 8%. WhatisthepresentvalueofJanesfutureincomestreambasedonhercurrentsalary?

2.SupposethatTFBankisofferingaloanata10%interestrate.Shouldyouchoose(i) the 7.59% financing offer on the advertisement above and pay $61,500 over 36 months or (ii) borrow the money from the bank at 10% and go for the $500 rebate, paying $61,000 upfront?