Question

Suppose that you will inherit a perpetuity that will pay a payment of $4000 every other...

Suppose that you will inherit a perpetuity that will pay a payment of $4000 every other year. The first payment will occur 10 years from now (end of year 10). If the discount rate is 10% annually, how much is the perpetuity worth today? What constant payment for the next 10 years would be equivalent to owning this perpetuity?

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