PROBLEM

Question $1$

For a lump sum investment of $$250,000$ that is invested at a rate of $3\%$ per annum and is to be compounded monthly, how many months does it take for the sum to grow to $$1,000,000?$

Question $2$

You are considering investing in two different investment options. The first option offers no return for the first three years, but afterward it offers to pay you $$20,000$ per year for four years. The second option offers to pay you $$20,000$ per year for three years and $$30,000$ in the fourth year. All payments are made at year$-$end. If a discount rate of $8\%$ per annum is assumed, determine by using the present value the option that offers you a higher return.