What is the value of a perpetuity that makes a payment of $114 per year? Assume...

Question

Question

What is the value of a perpetuity that makes a payment of $114 per year? Assume the current interest rate is 4%.

Answer 1

Answer #1

Present Value of a Perpetuity = Annual Payment / Interest Rate

Present Value of a Perpetuity = $114 / 0.04

Present Value of a Perpetuity = $2,850

Answer 2

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