Calculating Perpetuity Values The Maybe Pay Life Insurance Co. is trying to sell you an investment policy

Question:

Calculating Perpetuity Values The Maybe Pay Life Insurance Co. is trying to sell you an investment policy that will pay you and your heirs $20,000 per year forever. If the required return on this investment is 8 percent, how much will you pay for the policy?

Perpetuity
Perpetuity refers to payments that are made without an end or maturity date. A perpetuity is classified as an annuity, which is something that earns a dividend or receives a payment at a regularly scheduled interval, generally yearly. So, how...