A perpetuity with annual payments is payable beginning 1 0 years from now. The first payment is
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Question:
A perpetuity with annual payments is payable beginning years from now. The first payment is Each annual payment thereafter is increased by until a payment of is reached. Subsequent payments remain level at This perpetuity is purchased by means of annual premiums, with the first
premium of $P$ due immediately. Each premium after the first is of the preceding one. The annual effective interest rates are during the first years and thereafter. Calculate
P
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