Question

A perpetuity will make annual payments with the first payment coming 9 years from now. The first payment is for $4700, and each payment that follows is $150 dollars more than the previous one. If the effective rate of interest is 6.2%, what is the present value of the perpetuity?

Answer = $

Answer #1

A perpetuity is the fixed periodic payments made indefinitely. For example a irredeemable preference shares gives investors dividend indefinitely. This is perpetuity. To calculate growing perpetuities which is occurring indefinitely,

P= A/(i-g)

Where, P is present value of the perpetuity

A is first amount received of perpetuity

i is the rate of interest and g is the rate of growing perpetuity

Now, here percentage growth of perpetuity is = 150/4200 = 3.571%

So P= 4700/(.0620- .0357) = $ 178,707.227

Hence the present value of perpetuity is $178,707.227

(1 pt) A perpetuity will make annual payments, with the first
payment coming 9 years from now. The first payment is for 4700
dollars and each payment that follows is 120 dollars more than the
one before. If the effective rate of interest is 5.2 percent, what
is the present value?
Answer = dollars.

A perpetuity with annual payments of 150 is payable beginning 5
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A perpetuity with an annual payment of $1,000 (payments start N
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Determine the value of each
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(I did this problem, just want to check if I did it correctly
because the answer doesn't look right to me, not sure what I did
incorrectly, I got PV = 372,800.47)

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You are given a perpetuity that makes payments every two years,
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