How much would you be willing to pay for a perpetuity that paid a $50 annual payment

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How much would you be willing to pay for a perpetuity that paid a $50 annual payment this morning, and keeps growing at 3% per year, forever? Assume that you can borrow from the bank at a 10% interest rate compounded annually.

Related Book For answer-question

Financial Management for Public Health and Not for Profit Organizations

ISBN: 978-0132805667

4th edition

Authors: Steven A. Finkler, Thad Calabrese

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Posted Date: Jul 25, 2023 07:53 AM

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How much would you be willing to pay for a perpetuity that paid a $50 annual payment

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To calculate the present value of a perpetuity we can use the formula Present ... View the full answer

Financial Management for Public Health and Not for Profit Organizations

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