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perpetuities Perpetulties are also called annultles with an extended, or...

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Finance

perpetuities
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Perpetulties are also called annultles with an extended, or unlimited, life. Based on your understanding of perpetuities, answer the following questions: Which of the following are characteristics of a perpetuity? Check all that apply. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. The present value of a perpetuity is calculated by dividing the amount of the payment by the Investor's opportunity interest rate. The principal amount of a perpetulty is repaid as a lump-sum amount. In a perpetuity, returns-In the form of a series of identical cash flows-are samed. A local bank's advertising reads: "Give us $10,000 today, and we'll pay you $3,600 every year forever. If you plan to live forever, what annual interest rate will you earn on your deposit? 36.00% 50.40% 28.80% 32.40% Oops! When you went in to make your deposit, the bank representative said the amount of required deposit reported in the advertisement was incorrect and should have read $15,000. This revision will reduce the interest rate earned on your deposited funds. The change to your required deposit will cause your earned interest rate to change to

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