8. How much more is an annuity of $12,000 annually for 10 years with an interest of 6% than a perpetuity of $8,000 at the same rate?
Annuity =12000
Number of years =10
Rate =6%
PV of annuity
=PMT*((1-(1+r)^-n)/r)=12000*((1-(1+6%)^-10)/6%)=88,321.04
PV of Perpetuity =Perpetuity/Rate =8000/6% =133,333.33
8. How much more is an annuity of $12,000 annually for 10 years with an interest...
How much more is an annuity of $12,000 annually for 10 years with an interest of 6% than a perpetuity of $8,000 at the same rate?
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