A local bank advertises this deal: pay us $100 at the end of each year for 12 years, and then we'll pay you (or your beneficiaries) $100 at the end of each year forever. A. Calculate the present value of your payments to the bank if the interest rate is 7.25%. (Do not round up intermediate calculations. Round your answer to 2 decimal places.)

What is the present value of a $100 perpetuity deferred for 12 years if the interest rate is 7.25%? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

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To calculate the present value of the payments we can use the formula for the present value of an an... View the full answer