a. An investment pays you $20,000 at the end of this year, and $10,000 at the end of each of the four following years. What is the present value (PV) of this investment, given that the interest rate is 3% per year?

a. $27,753

b. $66,607

c. $55, 506

d. $44,405

B. A perpetuity has a PV of $27,000. If the interest rate is 4%, how much will the perpetuity pay every year?

a. $540

b. $864

c. $1080

d. $648