A local bank advertises the following deal: "Pay us $100 at the end of each year for 12 years and then we will pay you (or your beneficiaries) $100 at the end of each year forever."

Calculate the present value of your payments to the bank if the interest rate is 5.00%.

Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

What is the present value of a $100 perpetuity deferred for 12 years if the interest rate is 5.00%?

Note: Do not round intermediate calculations. Round your answer to 2 decimal places.

Is this a good deal?

Yes

No