Annual effective interest rate is 10%. You are thinking about the present value of two different perpetuities. The first has payments which start at $100 per year and increase by 10% cach year. forever. The second has payments which start at $1000 and increase by $1000 each year forever. Discuss the challenges and approaches you would use to try to find the present values. Bonus: For extra credit, find the present values.

Answer rating: 100% (QA)

Step 1 Perpetuities are the series of cash flows that are indefinite and occur at the end of each period These are the regular payments at an equal in... View the full answer