13.4
4. Ted Turner once offered to donate "1 billion dollars" to the U.N. charities. His actual offer was to give $100 million per year for 10 years, starting next year. For this question, assume that the interest rate is 12%, compounded annually.
a. What is his donation really worth today? (4 pts)
b.What would the donation be worth if he offered to give $75 million per year forever, starting next year? (3 pts)
c.What would it be worth if he offered to make the first of the ten $100 million payments immediately? Thus, his offer would be 10 annual payments of $100 million with the first to be paid today. (6 pts)
d.What would it be worth if he promised to make the 10 annual payments, but the first one would be made 4 years from now. (7 pts)