# Question: Look at the formula for the present value of an

Look at the formula for the present value of an annuity. What happens to the numerator as the number of periods increases? What distinguishes an annuity from a perpetuity? Why can’t we calculate the future value of a perpetuity?

**View Solution:**## Answer to relevant Questions

What is the relationship between the variables in a loan amortization and the total interest cost? Consider the variables of interest rates, amount borrowed, down payment, prepayment, and term of loan in answering this ...Answer parts a–c for each of the following cases. Answer parts a–c for each of the following cases. a. Calculate the future value at the end of the specified deposit period. b. Determine the effective annual rate ...Why is it important for corporate managers to understand how bonds and stocks are priced? Why do bond prices and bond yields move in opposite directions? What rights do they get in exchange for taking more risk than creditors and preferred share-holders take? Most large Japanese corporations hold their annual shareholders meeting on the same day and require voting in person. ...Post your question