What is the smallest possible effective rate of


1. A perpetuity pays $580 annually. At the time of the second payment, the value of the entire perpetuity (including the first payment) is $6600. What is the smallest possible effective rate of interest? (Round your answer to four places after the decimal.)

Answer = %

2. A deposit of $100,000 is made to an investment account today. At the end of each of the next four years, $2000 must be paid out to a beneficiary, and the account liquidated at the end of year four. If the liquidation value is $115,000 the account has earned an annual internal rate of return of?

 

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Financial Management: What is the smallest possible effective rate of
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