Question: Consider a perpetuity that pays $5000 per year with the first payment six years from now. One can purchase this perpetuity by making six annual

Consider a perpetuity that pays $5000 per year with the first

payment six years from now.

One can purchase this perpetuity by making six

annual payments of K with the first payment now. The effective annual interest

rate on all transactions is 6%. Determine K.

6. (Bonus problem) Consider a perpetuity that pays $5000 per year with the first payment six years from now. One can purchase this perpetuity by making six annual payments of K with the first payment now. The effective annual interest rate on all transactions is 6%. Determine K

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