Business, 22.09.2020 20:01 nicolehathaway1012
A rich relative has bequeathed you a growing perpetuity. The first payment will occur one year from now and will be $1,000. Each year after that, you will receive a payment on the anniversary of the previous payment that is 8% larger than the previous payment. This pattern of payments will go on forever. Assume that the interest rate is 12% per year.
Required:
a. What is today's value of the bequest?
b. What is the value of the bequest immediately after the first payment is made?
Answers: 1
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A rich relative has bequeathed you a growing perpetuity. The first payment will occur one year from...
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