British government 3.6% perpetuities pay 3.6 interest at the end of each year forever. Another bond, 2.1%

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British government 3.6% perpetuities pay £3.6 interest at the end of each year forever. Another bond, 2.1% perpetuities, pays £2.10 a year forever.

a. What is the value of 3.6% perpetuities if the long-term interest rate is 5.6%? (Round your answer to 2 decimal places.)

b. What is the value of 2.1% perpetuities? (Round your answer to 2 decimal places.)

Related Book For answer-question

Engineering Economy

ISBN: 978-0132554909

15th edition

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

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Posted Date: Nov 28, 2022 03:13 AM

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British government 3.6% perpetuities pay 3.6 interest at the end of each year forever. Another bond, 2.1%

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Engineering Economy

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