1. A family purchases a perpetuity-immediate that provides annual level payments of X. The price of the perpetuity is $10,000 at an annual force of interest of .06. Find the annual payment. Show all work and any financial calculator calculations as well.
2. A loan of 20,000 is repaid by a payment of X at the end of each year for 10 years. The loan has an annual effective interest rate of 11% for the first 5 years and 12% thereafter. Calculate X. Show the equation and steps on financial calculator if used.
3. A stock will pay dividends of $2, $4, and $9 over the next three years, and then increase dividends at a rate of 7% afterwards. Its required rate of return is 12%. What is the value of the stock? Round to the penny.