John Deere sells a tractor for$200,000 which is due in 4 years. What is the present value of this one time payment if the annual interest rate is 8%?

A.

$147,006

B.

$272,098

C.

$200,000

D.

$50,000

Professor Wolfe would like to go on a European vacation in 5 years and estimatesshe'll need$20,000. What amount should she invest today in order to have$20,000 in 5 years assuming she will earn4% in interest annually.A.

$4,000

B.

$16,439

C.

Can't Professor Wolfe figure this out forherself?

D.

$20,000

Prof Wolfe would like to retire today. She would like to receive$50,000 per year for the next 10 years before she starts receiving her social security. How much does she have to invest today assuming she will earn6% interest annuallyA.

$368,000

B.

$500,000

C.

$217,750

D.

.....don't care.