A perpetuity will make annual payments with the first payment coming 12 years from now. The...

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Finance

A perpetuity will make annual payments with the first paymentcoming 12 years from now. The first payment is for $4500, and eachpayment that follows is $150 dollars more than the previous one. Ifthe effective rate of interest is 4.8%, what is the present valueof the perpetuity?

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This growing perpetuity has two parts one is fixed payment 4500 every year and second is amount of 150 growing every year We can calculate the value of this See Answer

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A perpetuity will make annual payments with the first paymentcoming 12 years from now. The first payment is for $4500, and eachpayment that follows is $150 dollars more than the previous one. Ifthe effective rate of interest is 4.8%, what is the present valueof the perpetuity?

A perpetuity will make annual payments with the first payment coming 12 years from now. The...

70.2K

Verified Solution

Question

Finance

A perpetuity will make annual payments with the first paymentcoming 12 years from now. The first payment is for $4500, and eachpayment that follows is $150 dollars more than the previous one. Ifthe effective rate of interest is 4.8%, what is the present valueof the perpetuity?

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