PRESENT VALUE OF A PERPETUITY What is the present value of a $600 perpetuity if the...
PRESENT VALUE OF A PERPETUITY
What is the present value of a $600 perpetuity if the interest rate is 6%? Round your answer to the nearest cent.
$
If interest rates doubled to 12%, what would its present value be? Round your answer to the nearest cent.
$
Homework Answers
1.
Present value of a $600 perpetuity if the interest rate is 6%is calculated below:
Present Value = $600 / 6%
= $10,000
present value of a $600 perpetuity if the interest rate is 6% is $10,000.
2.
Present value of a $600 perpetuity if the interest rate is 12% that is double of previous one is calculated below:
Present Value = $600 / 12%
= $5,000
present value of a $600 perpetuity if the interest rate is 12% is $5,000.
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PRESENT VALUE OF A PERPETUITY
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