1. How many years does it take for an annuity to reach three-quarters the value of a perpetuity if the interest rate is 5%? If the interest rate is r? To reach fraction f of the value?
2. Recall from memory the annuity formula.
3. What is the PV of a 360-month annuity paying $5 per month, beginning at $5 next month (time 1), if the monthly interest rate is a constant 0.5%/month (6.2%/year)?