(1) Daniel owes $5,000. He repays the debt with level annual principal repayments and interest on the outstanding balance. All payments are made at the end of the year. Because Daniel is a student, the maximum he can afford to pay is $1,000 per year.

Calculate the largest annual effective interest rate on the loan such that Daniel is still able to completely pay off the debt in 8 years.

(2) A perpetuity-due with semi-annual payments consists of two-level payments of 300, followed by a series of increasing payments. Beginning with the third payment, each payment is 200 larger than the preceding payment.

Using an annual effective interest rate of i, the present value of the perpetuity is 475,000.

Calculate i.