1. Present Value of an Annuity Due If the present value of an ordinary, 5-year annuity is $5,900 and interest rates are 10 percent, what's the present value of the same annuity due?
$5,900
$5,990
$6,490
$5,400
2. Present Value of a Perpetuity A perpetuity pays $160 per year and interest rates are 6.6 percent. How much would its value change if interest rates increased to 9.1 percent?
$666.00 increase
$666.00 decrease
$400.00 decrease
$400.00 increase