A perpetuity has payments of 1, 1, 2, 1, 1, 3, 1, 1, 4,... Payments are...

Question

Question

A perpetuity has payments of 1, 1, 2, 1, 1, 3, 1, 1, 4,... Payments are made at the end of each year. Assuming an annual effe

business finance

Answer 1

Answer #1

Calculate present value of perpetuity as follows:

DE 76 Year Annuity PVF @ 5% PV of annuity 77 11 0.952380952 0.952380952 78 21 0.907029478 0.907029478 79 3 0.863837599 1.7276

Answer:60

Formulas:

A B C D 76 Year Annuity PVF @ 5% 77 1 1 =1/(1+5%)^B77 78 21 =1/(1+5%)^B78 79 32 =1/(1+5%)^B79 80 4 1 =1/(1+5%)^B80 81 5 1 = 1

Answer 2

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