\problemdata
       {annuities-college-loan} % latex-friendly label for the prob.
        {annuities} % The topic(s) of the problem content.  
        {?} % Source (if known)                                          
        {S00 ps5-1} % Usage (list ones you are aware of). 
        {Jack Kwok, S02} % Last revision info (author, date).   

\begin{problem} 

Suppose you were about to enter college today and a college loan
officer offered you the following deal: \$25,000 at the start of each
year for four years to pay for your college tuition and an option of
choosing one of the following repayment plans:

\begin{description}\itemsep 0\baselineskip
\item[Plan A:] Wait four years, then repay \$$20,000$ at the start of
  each year for the next ten years.
\item[Plan B:] Wait five years, then repay \$$30,000$ at the start of
  each year for the next five years.
\end{description}

Suppose the annual interest rate is currently 7\% and does not change
in the future.  

\begin{itemize}\itemsep 0\baselineskip
\item[a)] Which repayment plan would you choose?
\item[b)] What is the loan officer's effective profit (in today's
  dollars) on the loan?
\end{itemize}


\end{problem}