Solve the following problems:

4. An investor who buys a British Consol is entitled to receive annual payments from the government forever. What is the price of a Consol that pays $120 per year if the next payment occurs after one year? If the market interest rate is 5.7% 5. The company Inbursa tries to sell you an investment policy that will pay you and your heirs $20,000 a year forever. If the required return on this investment is 6.5%, how much will you pay for the policy? Suppose that Inbursa informs you that the policy has a cost of $340,000. At what interest rate would this be a fair operation