Problem $5-22$ Perpetuities $($LO$3)$

A local bank advertises the following deal: "Pay us $$100$ at the end of each year for $12$ years and then we will pay you $($or your

beneficiaries$)$ $$100$ at the end of each year forever."

a$.$ Calculate the present value of your payments to the bank if the interest rate is $6\mathrm{.}50\%.$

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

Present value

b$.$ What is the present value of a $$100$ perpetuity deferred for $12$ years if the interest rate is $6\mathrm{.}50\%?$

Note: Do not round intermediate calculations. Round your answer to $2$ decimal places.

Present value

c$.$ Is this a good deal?

No

Yes