1. A perpetuity-due has monthly payments in this pattern: Q, 2Q, 3Q, Q, 2Q, 3Q,...
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1. A perpetuity-due has monthly payments in this pattern:
Q, 2Q, 3Q, Q, 2Q, 3Q, Q, 2Q, 3Q, . . .
The present value of the perpetuity is $700,000 and the effective annual discount rate is 6%. Find Q.
The answer should be $1,803.15
2. A 30 year annuity-immediate has first payment $1200 and each subsequent payment increases by 0.5%. The payments are monthly and the annual effective rate is 8%. Find the accumulated value of the annuity at the end of 30 years.
The answer should be $3,380,750.50
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