7. You are offered an investment that will pay $12,000 per year for 15 years, beginning one year from now. If you feel that the appropriate discount rate is 1.2%, what is the investment worth to you today?

8. Your grandparents offered you some money via the following options. Assuming an annual interest rate of 12%, which option should you choose? Show your work.

a. Receive $10,000 immediately

b. Receive $1,000 at the end of each six months for seven years. This results in payments totaling $14,000. You will receive the first check in six months.

c. Receive $500 at the end of each year for four years, and then $10,000 at the end of the fifth year. This results in payments totaling $12,000.