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Business, 28.01.2021 22:10 prudencerufus

9. A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $1000. Each year after that, you will receive a payment on the anniversary of the last payment that is 8% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 12% per year. a. What is today’s value of the bequest? ( $25,000) b. What is the value of the bequest immediately after the first payment is made? ( $27,000)

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