Question 1
A perpetuity pays $550 at the end of every month. The PV of the perpetuity is $36,000. What is the effective interest rate (EIR) on the perpetuity?
◦ 19.95%
◦ 18.33%
◦ 9.17%
◦ 13.42%
◦ 15.15%
Question 2
An annuity with an infinite life is called
◦ a perpetuity.
◦ a prima.
◦ an indefinite.
◦ a deep discount.