Assume the total cost of a college education will be $$400,000$ when your child enters college $16$ years from now. Your parents have given you $$140,000$ to invest for purpose of meeting this cost. What annual rate of return must you earn on this investment to cover the cost of your child's college education?

A$.4\mathrm{.}48$ percent.

B$.5\mathrm{.}11$ percent

C$.7\mathrm{.}08$ percent

D$.8\mathrm{.}73$ percent

E$.6\mathrm{.}78$ percent

QUESTION $8$

As the winner of a song writing competition, you can choose between the prizes listed below. If the interest rate is $5\mathrm{.}0$ percent, which prize is the most valuable?

A$.$ $$150,000$ at the end of $4$ years.

B$.$ $$120,000$ now.

C$.$ $$35,000$ each year for $4$ years paid at the end of each year.

D$.$ $$6,000$ a year forever.

E$.$ $$4,000$ next year and increasing by $1\mathrm{.}75$ percent a year forever.