1. If the discount rate is 9%, then what is the present value of a $200 perpetuity with the first payment in four years?

a. 1,830 b. 1,780 c. 1,720 d. None of the above

Recompute your answer assuming that the first $200 payment grows at 6% per year forever.

a. 5,150 b. 5,230 c. 5,780 d. None of the above