A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $2000. Each year after that, on the anniversary of the last payment you will receive a payment that is 4% larger than the last payment. This pattern of payments will go on forever.

If the interest rate is 11% per year,

a. What is today’s value of the bequest?

b. What is the value of the bequest immediately after the first payment is made?