Solve #10 and #12.

10. Calculating Perpetuity Values Larry's Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $25,000 per year forever. If the required return on this investment is 4 percent, how much will you pay for the policy? 11. Calculating Perpetuity Values In the previous problem, suppose Larry's told you the policy costs $645,000. At what interest rate would this be a fair deal? 12. Calculating EAR Find the EAR in each of the following cases. Stated Rate (APR) Number of Times Compounded Effective Rate (EAR) 10.2% 18.0 13.5 9.5 Quarterly Monthly Daily Semiannually