Concepts learned in finance can be put to everyday use, for example, figuring out how much you should pay for a house. If your current annual rent payment is $$12,000,$ and you believe that $10$ percent is the appropriate discount rate, you would be happy to pay $Answer $1$ Question $12($in units and no $1,000$ separators$)$ for a comparable house. Meanwhile if you expect the rent to increase by $5$ percent each year, and you believe that Answer $2$ Question $12$ percent $($one decimal place$)$ is the appropriate discount rate, it would be reasonable to pay $$200,000$ for a comparable house $($Since there's typically not much difference between twenty$/$thirty year of cashflows and perpetual cashflows, assume that, for the sake of convenience, the house will last forever$).$