1. Present Value of a Perpetuity A perpetuity pays $190 per year and interest rates are 6.9 percent. How much would its value change if interest rates increased to 9.4 percent?
$475.00 decrease
$732.34 decrease
$732.34 increase
$475.00 increase
2. Present Value of an Annuity What is the present value of a $400 annuity payment over 6 years if interest rates are 9 percent?
$670.84
$2,013.18
$238.51
$1,794.37