Calculate the present value of a single future amount. Your grandmother was a finance professor and, for some reason, always challenged you to "think critically" and "figure out the math" for just about every financial decision you made in your life...and certainly when it came to asking her for money. In her will she left you one last tricky set of options -two additional options for the cash, one of which was to receive the $3500 three years from now. She asked you to calculate the present value of the future $3500 using an ROI of 8% and make a decision on whether you want the cash three years from now, or not.

Part Two - Calculate the future value of an annuity. The final option your grandmother presented to you was to receive a regular annuity payment $700 over 5 years and she wanted you to calculate the annuity's future value with an ROI of 8%. Do you chose this option? Why or why not?