The period payments are $320 which is paid for forever at an opportunity cost of 4%, 8%, and 10%. Present value of perpetuity is the current value of an annuity which has continuous payments at predetermined interest rate for infinite period. P V = P M T r Here, The present value is “ PV ”. The periodic payments are “ PMT ”. The interest rate is “ r ”.

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Chapter 4, Problem 17PROB

Summary Introduction

The period payments are $320 which is paid for forever at an opportunity cost of 4%, 8%, and 10%.

Present value of perpetuity is the current value of an annuity which has continuous payments at predetermined interest rate for infinite period.

PV=PMTr

Here,

The present value is “PV”.

The periodic payments are “PMT”.

The interest rate is “r”.

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