3. A perpetuity-immediate pays 100 per year. Immediately after the fifth payment, the perpetuity is exchanged for a 25-year annuity-immediate that will pay X at the end of the first year. Each subsequent annual payment will be 8% greater than the preceding payment. Immediately after the 10th payment of 25-year annuity, the annuity will be exchanged for a perpetuity-immediate paying Y per year. The annual effective interest rate is 8% Calculate Y (A) 110 (B) 120 (C) 130 (D) 140 (E) 150 4. Mary purchases an increasing annuity-immediate for 50,000 that makes twenty annual pay- ments as follows: (i) P, 2p, ..., 10P in years 1 through 10; and (ii) 10P(1.05), 10P(1.05), ..., 10P(1.05) in years 11 through 20. . The annual effective interest rate is 7% for the first 10 years and 5% thereafter. Calculate P. (A) 564 (B) 574 (C) 584 (D) 591 (E) 601