Another bank pays $20 every 3 months as a perpetuity. The quoted annual rate on this...

Question

Question

Another bank pays $20 every 3 months as a perpetuity. The quoted annual rate on this investment option is 4%. What is the pre

Answer 1

Answer #1

Present Value of perpetuity = Annual Cash flow Rate of Interest = Annual Cash Flow = 20 * 4 Present Value of perpetuity = 80

Answer 2

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