1. You are considering an investment that will pay you $6,000 per year for the next 4 years, and will also give you a lump sum at the end of the ten years for $20,000. The investment costs $28,500. What is the return on this investment?
2. You are offered an investment that will pay you $100 in one year, $300 in the next year, $300 the next, $800 the next year. You can earn 12 percent on very similar investments. What is the most you should pay for this investment?