​(Present value of a growing​ perpetuity)  As a result of winning the Gates Energy Innovation​ Award, you are awarded a growing perpetuity. The first payment will occur in a year and will be for ​$20,000. You will continue receiving monetary awards annually with each award increasing by 5 percent over the previous​ award, and these monetary awards will continue forever. If the appropriate interest rate is 12 ​percent, what is the present value of this​ award?       Question content area bottom Part 1 The present value of the award is ​$enter your response here. ​ (Round to the nearest​ cent.)

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A: Present value = Amount*PV$1(n=3, i=8%)

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A: Step 1:Present value of annuity = Annual amount * PVA(Rate , years).Step 2:Step 3: Step 4:

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A:

Q: (Present value of a growing perpetuity) As a result of winning the Gates Energy Innovation Award,…

A: First payment = $10,000Growth rate = 6%Interest rate = 11%

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A: First Payment = p1 = $30,000Growth rate = g = 7%Interest rate = r = 12%Time = Forever

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Present Value

Present value (PV) is defined as the current or present value of all future sums of cash flow or money at a specified rate of return. This rate of return is known as the discounted rate, which is essentially the interest rate, discounted over some time. The expected cash flows are discounted at a discount rate to compute the present value. The higher the discount rate, the higher the future value (FV), but the lower the present value.