Suppose that there is no inflation and an insurance company offers a contract that would pay 000,000 with certainty 50 years from now. A. If interest is compounded annually, what is the present value of this contract if: 1. the rate of interest is 9%? 2. the rate of interest is 1% ? B. Suppose that the interest rate is uncertain with probability 0.5 of being 9% and probability 0.5 of being 1%. What is the expected value of the interest rate? What is the present value o the contract using the expected interest rate? Is this equal to the expected present value