Question: 1. A perpetuity-due paying 5 every year has a present value of 110. An annuity-immediate paying 10 monthly for 5 years has the same effective

1. A perpetuity-due paying 5 every year has a present value of 110.

An annuity-immediate paying 10 monthly for 5 years has the same effective rate of interest what is the present value of this annuity?

2. We wish to purchase a ten year annuity with 100,000 present value.Given an effective rate of interest of 5%.

What is the difference between the monthly payment for a monthly annuity-immediate and a monthly annuity-due?

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