"We pay you $10,000 a year for 10 years and thereafter you will pay us $10,000 a year forever!" -reads the Highlander (who lives forever) in an ad. What must be the rate of interest (EAR) in order for this to be a fair deal, (i.e. the rate of interest that makes the present value of these two series of cash flows equal). Assume that all payments occur at the end of the year, so the Highlander receives the first payment at the end of year one and he makes his first payment at the end of year 11.

• ANSWER: 7.1773% (how do you get this number??)