**Show Work and Formula in Excel**

1. How much life insurance would a person buy if he wants to leave enough money to ensure that their family will receive $100,000 dollars in interest, of constant year 0 value dollars? The interest rate expected from banks is 4 percent and the inflation rate is expected to be 2 percent per year.

$2,500,000

$5,000,000

$5,100,000

$5,000,000

2. In January of 2018, the appropriate construction cost index had a value of $4,260. In January of 2005, the value was $2,746. In January 2010 you received a bid for a structure of 7.25 million. Another building (virtually identical) is planned for a bid opening in January 2020. Estimate the new building bid.

11.25 million

12.03 million

10.61 million