Question 2 (10 marks)

a) High Train Co. is saving money to build a new loading platform. Three years ago, they set aside $24,000 for this purpose. Today, that account is worth $28,399. What annual rate of interest is High Train earning on this investment? (5 marks)

b) Given an interest rate of 10 percent per year, what is the value at date t = 10 of a perpetual stream of $1500 annual payments that begins at date t = 18? (5 marks)

Question 2 (10 marks) a) High Train Co. is saving money to build a new loading platform. Three years ago, they set aside $24,000 for this purpose. Today, that account is worth $28,399. What annual rate of interest is High Train earning on this investment? ( 5 marks) b) Given an interest rate of 10 percent per year, what is the value at date t=10 of a perpetual stream of $1500 annual payments that begins at date t=18 ? ( 5 marks)