Q3. It will cost $20,000 a year for four years when an 8-year old child is ready for college. How much should be invested today if the child will make the first of four annual withdrawals 10-years from today? The expected rate of return is 8%.

A)   $66,243.

B)   $30,683.

C)   $33,138.

Q4. An investor who requires an annual return of 12% has the choice of receiving one of the following:

A. 10 annual payments of $1,225.00 to begin at the end of one year.

B. 10 annual payments of $1,097.96 beginning immediately.

Which option has the highest present value (PV) and approximately how much greater is it than the other option?

A)   Option A's PV is $42 greater than option B's.

B)   Option B's PV is $114 greater than option A's.

C)   Option B's PV is $27 greater than option A's.

thx