Please show all work and formulas used.

1. You plan on saving $10,000 a year for retirement and expect to retire in 40 years. You also expect annual tuition of $30,000 for your son starting from 15 years from now for 4 years. How much will you be able to spend annually from your retirement savings, if you expect to live for 30 years after you retire? Assume no taxes and an interest rate of 6%. Assume all numbers are real, so you do not need adjust for inflation.

2. Assume that an investment project costs $50,000 at Year 0 and another $50,000 at Year 1, but creates a payoff of $50,000 at Year 2, and a payoff of $60,000 at Year 3.

a. Should you take the project if the interest rate is 9%?

b. What if the interest rate is 3%?