Q1. Which of the following three investment choices grows to a larger future value, $10000 invested for 2 years at:

a. 8 percent each year

b. 6 percent the first year and 10 percent the second year or

c. 10 percent the first year and 6 percent the second year?

Explain your results.

Q2. You have been hired as a financial advisor to Seattle Seahawks quarterback, Russell Wilson. He has received two offers for

playing professional basketball and wants to select the best offer, based on considerations of money only. Offer A is a $35m offer for $7m a year for 5 years. Offer B is a $38m offer of $5m a year for four years and $18m in year 5. What is your advice? (Hint: compare the present value of each contract by assuming a range of interest rate, say 4% - 10%).