1. If you have $675,000 saved for retirement how many years will it last if you earn an annual interest rate of 7% and withdraw $46,000 at the beginning of each year?
A) 14
B) 48
C) You will never run out of money
D) 23
E) 52
2. Assume you won $60 million in the lottery. You were given the option of receiving twenty $3 million annual payments, with the first payment due today or taking a $37.1 million lump sum today. You want to compare the PV annuity assuming you can invest the money at a 6.5% annual rate and which option is best?
A) $34,409,764; take the lump sum
B) $35,204,131; take the lump sum
C) $34,409,764; take the annuity
D) $38,662,810; take the annuity
E) $36,474,349; take the lump sum