Please Answer Question 3 on paper, Thank you.

1. (5 pts) A perpetuity-immediate pays $100 per year (the payment is made at end of each year). The annual effective rate of interest (i.e. EAR) is 8%. What is the present value of this perpetuity- immediate? 00 Pl(1) of 4. 2. (5 pts) (Continuing question 1) What is the value of this perpetuity-immediate after the payment? Hint: The first 5 payments are received, so you don't need to consider them. Or, it is the same as "a new perpetuity starts paying 6 years from today. Then what is the value at end of the fifth year. Con esta ob omogos ONA 10) location or othe- bol TO 3. (5 pts) (Continuing question 1 and 2) Immediate after the fifth payment, the perpetuity is exchanged for a 25-year annuity-immediate that will pay X at the end of the first year. Each subsequent annual payment will be 8% greater than the preceding payment. What is X? Hint: Use time diagram, and think about present value of this 25-year annuity-immediate. Pole) =(s) (Polen) ol = 37 Nove ign oooo