8. value:

1.50 points

A local bank advertises the following deal: Pay us $100 at the end of each year for 11 years and then we will pay you (or your beneficiaries) $100 at the end of each yearforever.

a.	Calculate the present value of your payments to the bank if the interest rate available on other deposits is 8.50%.(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

$

b.	What is the present value of a $100 perpetuity deferred for 11 years if the interest rate available on other deposits is 8.50%.(Do not round intermediate calculations. Round your answer to 2 decimal places.)

Present value

$