The present value of a perpetuity is equal to the payment on the annuity, PMT, divided by the interest rate, r: PVP PMT r. What is the sum, or future value, of a perpetuity of PMT dollars per year? (Hint: The answer is infinity, but explain why.) 9-8 When financial institutions, such as banks or credit unions, advertise the rates on their loans, they often report the APR. If you wanted to compare the interest rates on loans from different financial institutions, should you compare the APRs?
9-7 The
9-8 When financial institutions, such as banks or credit unions, advertise the rates on their loans, they often report the APR. If you wanted to compare the interest rates on loans from different financial institutions, should you compare the APRs? Explain.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Perpetuity is a type of
True or False
by Bartleby Expert
