Thank you

14) Present Value of Annuity. You are entering into a contract that will provide you with an income of $250,000 each year for the next 40 years. If the annual interest rate is 15 percent, what is the present value of that stream of payments (or how much of a deposit do you need to get that payment amount per year)? STORY (very similar to what was shown in class): YOU and your BEST FRIEND just graduated from college. You both went to the same college and majored in the same field. You both started working at age 22 in the same workplace. Each of you decided upon a different course of action for your respective retirement plans. Assuming each plan earned 15% and both of you decided to retire at age 60 , calculate the earnings each plan generated. Upon the advice of your Personal Finance professor (hint, hint), YOU bgan immediately putting $7,000 per year in an individual retirement account (IRA) and $20,500 per year in a 401K. In total you put in $27,500 each year. You contributed for a total of 30 years. After 30 years, you made no further contributions into the account. Your BEST friend, did not contribute to their retirement accounts until they turned 30 , even though you both worked in the same place and received the same plans. They had planned to simply invest $7000 and $20,500 each year for the remaining years until they retired at age 60 . In total they put in $27,500 each year until age 60