(please answer both questions)

Consider a 40-year annuity-due with annual payments such that the first is 900 at time 0 and each subsequent payment decreases by 5%. Find the PV of this annuity at time 0 given an annual effective rate of interest i = 3%.

a) 8506

b) 9875

c) 10215

d) 11131

e) 12229

Consider a perpetuity-immediate with level annual payments of 30 at times 1, 2, ..., 10. After time 10, payments increase by 4% every year forever. Find the PV of this perpetuity at time 0 given an annual effective rate of interest i = 5%.

a) 1085

b) 2147

c) 1109

d) 3508

e) 3363