You are willing to pay $31,250 now to purchase a perpetuity that will pay you and your
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You are willing to pay $31,250 now to purchase a perpetuity that will pay you and your heirs $2,500 each year, forever, starting at the end of this year.
If your required rate of return does not change, how much would you be willing to pay if this were a 40-year, annual payment, ordinary annuity instead of perpetuity?
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Related Book For
Financial Markets And Institutions
ISBN: 9781292215006
9th Global Edition
Authors: Stanley Eakins Frederic Mishkin
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