The Perpetual Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $18,500 per year forever.

If the required return on this investment is 5.9 percent, how much will you pay for the policy? (Round your answer to 2 decimal places. (e.g., 32.16))

Present value

$

Suppose the Perpetual Life Insurance Co. told you the policy costs $460,000. At what interest rate would this be a fair deal? (Round your answer to 2 decimal places. (e.g., 32.16))

Interest rate

%