Perpetuity A provides payments of 3000 every six months with the first payment six months from today.  Perpetuity B provides payments of the amount of k every two years with the first payment due now. An annual effective interest rate of 4.94% is given. The two perpetuities have the same present value. Determine the value of the payment k.

Principles of Accounting Volume 1
19th Edition
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax
Chapter12: Current Liabilities
Section: Chapter Questions
Problem 5Q: If Bergen Air Systems takes out a $100,000 loan, with eight equal principal payments due over the...
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Perpetuity A provides payments of 3000 every six months with the first payment six months from today. 

Perpetuity B provides payments of the amount of k every two years with the first payment due now.

An annual effective interest rate of 4.94% is given. The two perpetuities have the same present value. Determine the value of the payment k. 

 

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