Question 4. (24 points) (a) A Houston policeman is qualified to retire at the age of 52 and receive a pension of $36,000 a year. If this pension is valued as a perpetuity with an interest rate (IRR) of 5%, what is the formula for the present value of this pension? (b) What is the formula for the present value of this pension for a policeman who currently is 40 years old and a life expectancy of 77 years? (c) If the assumed interest rate is reduced to 4%, will the present value of this pension go up, down or stay the same? (Circle your answer)