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As a result of winning the Gates Energy Innovation Award, you are awarded a growing perpetuity....

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Finance

As a result of winning the Gates Energy Innovation Award, youare awarded a growing perpetuity. The first payment will occur in ayear and will be for $2,685. You will continue receiving monetaryawards annually with each award increasing by 4% over the previousaward, and these monetary awards will continue forever. If theappropriate annual interest rate is 8.08%, what is the presentvalue of this award?

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3.8 Ratings (519 Votes)
The first payment will occur in a year and will be for 2685 annually value to be increasing by 4 means 26854100 10740 totally increasing this year by 10740 total value it will be    See Answer
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Transcribed Image Text

As a result of winning the Gates Energy Innovation Award, youare awarded a growing perpetuity. The first payment will occur in ayear and will be for $2,685. You will continue receiving monetaryawards annually with each award increasing by 4% over the previousaward, and these monetary awards will continue forever. If theappropriate annual interest rate is 8.08%, what is the presentvalue of this award?

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