A local bank advertises the following deal: "Pay us $$100$ at the end of each year for $10$ years and then we will pay you $($or

your beneficiaries$)$ $$100$ at the end of each year forever."

Calculate the present value of your

A$.$ payments to the bank if the interest rate

is $4\mathrm{.}50\%.$

ANS

What is the present value of a $$100$

B$.$ perpetuity deferred for $10$ years if the

interest rate is $4\mathrm{.}50\%?$

ANS

C$.$ Is this a good deal?

ANS