You are to receive a $250,000 lump sum payment at the end of a 6-year period. The relevant interest rate or rate of return for the next 6-years is 5.50%, and the compounding period is annually. What is the Present Value of the $250,000 lump sum payment, i.e. how much must you contribute today to receive $250,000 in 6 years?

Calculate the Future Value (FV) of $25,000 invested today, if the investment earns 6.00% annually (and compounded semi-annually) and the investment period is ten (10) years.

Suppose you were the sole winner of the Power Ball Lottery and the corresponding $500 million jackpot. You may either receive either a lump sum payment now, or a series of twenty-five $20 million payments per year, beginning immediately for 25 periods. If the current 25-year interest rate is 4.5%, compounded annually, what should the lump sum payment be today to make you indifferent between receiving a lump sum payout or receiving the $20 million per year 25-year annuity set of payments? What do you call this type of annuity?