Question: Exercies 2. [5] We consider an annuity immediate with the following annual n payments at an annual effective interest rate i : A, A +

Exercies 2. [5] We consider an annuity immediate with the following

Exercies 2. [5] We consider an annuity immediate with the following annual n payments at an annual effective interest rate i : A, A + B, A + 2B, A + (n 1)B a) Prove that the present value of this perpetuity is equal to: ani -nun PV = Aanji + B i b) Deduce the present value of this annuity if it continuous infinitely. Exercies 2. [5] We consider an annuity immediate with the following annual n payments at an annual effective interest rate i : A, A + B, A + 2B, A + (n 1)B a) Prove that the present value of this perpetuity is equal to: ani -nun PV = Aanji + B i b) Deduce the present value of this annuity if it continuous infinitely

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