) Two people wish to buy your house. The first person offers you $200,000 today, while the second person offers you twenty five annual payments of $15,000.
Assume a 5 percent interest or discount rate.
(a) What is the present value of each offer? [5 Points]
(b) If you could take either offer, which person would you sell your house to?
[5 Points]
(c) Kendra wants to be able to make withdrawals of $60,000 a year for 30 years
after retiring in 35 years. How much will she have to save each year up until
retirement if her account earns 7% interest? [10 Points]
