You are offered an annuity that will pay you $200,000 per year, at the end of the year, for 25 years. The first payment will arrive one year from now. The last payment will arrive 25 years from now. Suppose your annual discount rate is i=16.25%. How much are you willing to pay for this annuity? (hint: this is the same as the present value of an annuity.)

An investment gives you a 16.75% nominal return over 1 year. There was 2.5% inflation over that year. What was your exact real return? (don't use the Fisher Equation)