Question 7 & 8

Question 7 (Mandatory) (8 points) Bob's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $700 per year forever starting today. If the annual rate of interest is 12%, how much will you pay for this policy? (8 points) Oa. 5,800.00 Ob. 5,833.33 OC 6,533.33 Od. 5,208.33 Question 8 (Mandatory) (10 points) You are scheduled to receive annual payments of $3,600 for each of the next 12 years . The discount rate is 8 percent. What is the difference in the present value if you receive these payments at the beginning of each year rather than at the end of each year? ( 10 points) a. $2,170.39 O b. $2,511.07 O c. $2,021.18 Od. $2,027.94 jestion 9 (Mandatory) (5 points)