1. A perpetuity pays $540 annually. At the time of the second payment, the value of the entire perpetuity (including the first payment) is $6600. What is the smallest possible effective rate of interest?

2. The Little Red-Haired Girl makes quarterly deposits into an account paying an effective interest rate of 2.7% per quarter. The first deposit is $4650, and each subsequent deposit is $150 SMALLER than the previous one. How much is in the account immediately after the 11th deposit?

Answer rating: 100% (QA)

1 The face value value of entire perpetutiy 6600 The issue price 540 Total yearly pric... View the full answer