Problem 5-23 Perpetuities (LO3)

A local bank will pay you $119 at the end of each year for your lifetime if you deposit $1,400 in the bank today. If you plan to live forever, what interest rate is the bank paying? (Enter your answer as a percent rounded to 2 decimal places.)

Interest rate

%

Problem 5-37 Annuity Due (LO3)

a. If you borrow $2,400 and agree to repay the loan in four equal annual payments at an interest rate of 10%, what will your payment be? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

	Amount of payment

b. What will your payment be if you make the first payment on the loan immediately instead of at the end of the first year? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

	Amount of payment