Problem 26 tion.comVflow/connect.htmnreturnur!https%3A%2F%2Fconnect.mh education.com%2Fpaamweb%2Findex, ht damentails of Corporate Finance- Brealey, Myers, and Marcus, 9e, The Time Value of Money 25. Perpetuities. British government 4% perpetuities pay £4 interest each year forever. Another bond. 2.5% perpetuities, pays LO5-3) a. What is the value of 4% perpetuities if the long-term interest rate is 6%? b, what is the value of 2.5% perpetuities? 26. Annuities. LO5-3g) a. What is the present value of a 3-year annuity of S100 if the discount rate is 6%? b. What is the present value of the annuity in part (a) if you have to wait 2 years instead of 1 year for the first payment? 7. Annuties. Professor's Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $80,000 at age 65, the professor $600 a month until death. (LO5-3) a If the protessor's remaining life espectancy is 20 years, what is the monthly interest rate on this annuity? b. What is the effective annual interest rate? с. If the monthly interest rate is 5%, what monthly annuity payment can the firm ouer 10 th firm ofer to the retiring professor? 28. Annuities. You want to buy a new car, but you can make an initial payment of only S2 afford monthly payments of a. If the APR on auto loans is 12% and you finance the purcha se over 48 months, what is the maximum price you can pay can you aftord if you finance the purchase over 60 les. You can buy a car that is advertised for $24.000 on the tollowi 9 Annuities. You can buy that is ms: (a) pay $24,000 and receive a $2.000 rebate f tion.comVflow/connect.htmnreturnur!https%3A%2F%2Fconnect.mh education.com%2Fpaamweb%2Findex, ht damentails of Corporate Finance- Brealey, Myers, and Marcus, 9e, The Time Value of Money 25. Perpetuities. British government 4% perpetuities pay £4 interest each year forever. Another bond. 2.5% perpetuities, pays LO5-3) a. What is the value of 4% perpetuities if the long-term interest rate is 6%? b, what is the value of 2.5% perpetuities? 26. Annuities. LO5-3g) a. What is the present value of a 3-year annuity of S100 if the discount rate is 6%? b. What is the present value of the annuity in part (a) if you have to wait 2 years instead of 1 year for the first payment? 7. Annuties. Professor's Annuity Corp. offers a lifetime annuity to retiring professors. For a payment of $80,000 at age 65, the professor $600 a month until death. (LO5-3) a If the protessor's remaining life espectancy is 20 years, what is the monthly interest rate on this annuity? b. What is the effective annual interest rate? с. If the monthly interest rate is 5%, what monthly annuity payment can the firm ouer 10 th firm ofer to the retiring professor? 28. Annuities. You want to buy a new car, but you can make an initial payment of only S2 afford monthly payments of a. If the APR on auto loans is 12% and you finance the purcha se over 48 months, what is the maximum price you can pay can you aftord if you finance the purchase over 60 les. You can buy a car that is advertised for $24.000 on the tollowi 9 Annuities. You can buy that is ms: (a) pay $24,000 and receive a $2.000 rebate f