a) Holly Foods Market, Inc. has an obligation to pay its supplier $441,000 on December 31, 2052, two years from today. Suppose that the manager of the firm wants to prepare for this upcoming payment. If the firm can earn a risk-free rate of 5% per year, what is the amount of funds needed today, December 31, 2050?
*For full credit, you must show the steps/calculation toward your results.
b) Today is December 31, 2060. You expect to receive two payments, $30,000 at the end of 2063 and $40,000 at the end of 2064. Upon receiving each payment, you will invest them at 5% per year until the end of 2069. What will the value of your investment be at the end of 2069? Provide your results in two decimal places (e.g., 600.7378 = 600.74).
*For full credit, you must show the steps/calculation toward your results.