20. You have the opportunity to purchase a perpetuity which pays $5,000 annually forever. If you require a rate of retum of 8 percent on such investments, what is the most that you would be willing to pay for this security? a. $50,000 b. $60,000 c. $62,500 d. $75,000 e. $10,000 21. Suppose you plan to save $50 per year at 10 percent interest for the next twenty years (treat as an ordinary annuity). Afterwards, you will leave the money in the account for another 10 a. $6,354.81 will the value of the account be at the end of year 30 ? b. $7,427.83 c. $7,922.33 d. $8,591.00 e. $6,752.46 22. Hess Distributors is financing a new truck with a loan of $20,000 to be repaid in five annual installments of $5,276. What is the interest rate on the loan? a. 7% b. 8% c. 9% d. 10% e. none of the above