a) Penn Station is saving money to build a new loading platform. Two years ago, they set aside $24,000 for this purpose. Today, that account is worth $28,399. What annual rate of interest is Penn Station earning on this investment?          b) Given an interest rate of 8 percent per year, what is the value at date t = 9 of a perpetual stream of $500               annual payments that begins at date t = 17?

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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  1. a) Penn Station is saving money to build a new loading platform. Two years ago, they set aside $24,000 for this purpose. Today, that account is worth $28,399. What annual rate of interest is Penn Station earning on this investment? 

        b) Given an interest rate of 8 percent per year, what is the value at date t = 9 of a perpetual stream of $500               annual payments that begins at date t = 17?

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