What is the present value of a perpetuity consisting of equal payments of $66 every 3...

What is the present value of a perpetuity consisting of equal payments of $66 every 3 months, where the first payment occurs 3 months from now, and the interest rate is 12% p.a.?

Select one:

a. $59

b. $2200

c. $550

d. $64

Solutions

Expert Solution

Rate per 3 month =12%/4 =3%
PV of Perpetuity =Equal Payments/Rate per quarter =66/3% =2200(Option b is correct option)

jeff jeffy answered 2 years ago

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