Problem
1. What would you calculate the price of an annuity paying £12,000 per annum (starting in 12 months' time) to be if the market rate of interest is
(a) 5%, (b) 10%, (c) 15%, (d) 20%?
2. A government bond guarantees an annual payment of £140 in perpetuity; what will it be priced at, given a market rate of interest of 4%?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.