1. At an annual effective rate of interest of 3.2%, a liability has a present value of $630 and a Macaulay duration of 8. If the first-order Macaulay approximation of the present value of this liability at a new interest rate i is 659, find i.

2. The price of a 5-year annuity-immediate with annual level payments of $100 is calculated at an annual effective interest rate of 6. Estimate the new price of this annuity if the interest rate drops to 5.7 using the first-order Macaulay approximation.