1. A local magazine is offering a $10,000 grand prize to one lucky winner. The prize will be paid in five annual payments of $2,000 each, starting one year after the drawing. How much would this prize be worth to you today if you can earn 8 percent on your money?
A. $5,550.50
B. $5,925.24
C. $6,050.82
D. $7,985.42
E. $8,624.25
2. You just won a contest! You will receive $50,000 a year for 30 years, starting today. If you can earn 10 percent on your investments, what are your winnings worth today?
A. $150,000.00
B. $333,333.33
C. $436,510.50
D. $450,000.00
E. $518,480.30