British government 4.8% perpetuities pay £4.8 interest at the end of each year forever. Another bond, 3.3% perpetuities, pays £3.30 a year forever.
a. What is the value of 4.8% perpetuities if the long-term interest rate is 6.8%? (Round your answer to 2 decimal places.)
Perpetuity value £
b. What is the value of 3.30% perpetuities? (Round your answer to 2 decimal places.)
Perpetuity value £