The interest rate is 10%.

a. What is the PV of an asset that pays $1 a year in perpetuity?

b. The value of an asset that appreciates at 10% per annum approximately doubles in seven years. What is the approximate PV of an asset that pays $1 a year in perpetuity beginning in year 8?

c. What is the approximate PV of an asset that pays $1 a year for each of the next seven years?

d. A piece of land produces an income that grows by 5% per annum. If the first year’s income is $10,000, what is the value of the land?