Question: receive an infinite payment stream as follow: recewe an te payment stream as follow 1.022 1.023 1.02 1 1.02 a) R is the annual payment

recewe an te payment stream as follow 1.022 1.023 1.02 1 1.02

receive an infinite payment stream as follow:

recewe an te payment stream as follow 1.022 1.023 1.02 1 1.02 a) R is the annual payment and the first payment is received when the investment is made now. Future payments are discounted at an annual 2% rate. Suppose now the first payment is shifted and received one year from now, please calculate again the current investment which has to be made now. b) In addition, due to inflation, it is now suggested that R is increased by 1% each year, please calculate again the investment which has to be made now in (a).

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