Suppose you are a financial planner...

5. Suppose you are a financial planner and you have been asked to answer the following questions from two clients. a.) (2) On Jane's 20th birthday, her grandmother promises to pay her $1000 when she turns 25. What is the present value of this promise, assuming a nominal discount rate of 4 % with continuous discounting? b.) (2) Prof. Shiell is considering buying an apartment building, which he will rent out to university students. The estimated annual profit is $75,000, and it is assumed that this level of profit will continue indefinitely. What is the present value of the building? Assume a nominal interest rate of 4 percent and continuous compounding