Question
In: Finance
Urgently required. What is the present value (PV) today of a stable perpetuity that pays $11,000...
Urgently required.
What is the present value (PV) today of a stable perpetuity that pays $11,000 every 3 years, starting 7 years from today? The appropriate annual discount rate is 12% p.a. Round your answer to the nearest dollar. Do not include the $ symbol nor the separating comma, if any Thus, for example, if the PV is $24,323 55 write 24324 in the answer box. IMPORTANT. Use at least 4 decimals in all your intermediate calculations In the case of a discount rate, the 4-decimal requirement applies to the percentage version; that is, the decimal version would have 6 decimals. For example, 12345% would become 0,012345. Write your answer rounded to the dollar, e.g., 6543 (Acceptable error = 200)
Solutions
jeff jeffy answered 2 years agoRelated Solutions
What is the difference between the payment (PMT) and present value (PV) in a perpetuity? What...
What is the difference between the payment (PMT) and present
value (PV) in a perpetuity? What are the proper definitions of
each?
For example, this problem that I'm solving now:
"What should you be willing to pay in order to
receive $5,000 every six months forever, if you require 8% per year
on the investment"?
Using the formula:
Perpetuity Present Value = Payment/ Interest Rate
I initially started solving for Payment (PMT) (because it
directly asks you to), but my...
what is the present value of a perpetuity that pays $8.50 per year forever (at the...
what is the present value of a perpetuity that pays $8.50 per
year forever (at the end of every year) if the appropriate discount
rate is 7%
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(Present value of a perpetuity) What is the present value of
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percent?
The present value of the perpetuity is $(...)
What is the present value (PV) of an investment that pays $90,000every year for four...
What is the present value (PV) of an investment that pays $90,000
every year for four years if the interest rate is 9% APR,
compounded quarterly?
The present value of a constant growth perpetuity is $100. If the perpetuity pays $5 next...
The present value of a constant growth perpetuity is $100. If
the perpetuity pays $5 next year and the discount rate is 10%, by
what rate is the perpetuity growing?
What is the present value (PV) of an investment that pays $90,000 every year for four...
What is the present value (PV) of an investment that pays
$90,000 every year for four years if the interest rate is 9% APR,
compounded quarterly?
What is the present value (PV) of an investment that pays $90,000 every year for four...
What is the present value (PV) of an investment that pays
$90,000 every year for four years if the interest rate is 9% APR,
compounded quarterly?
eBook Problem 4-27 Present Value of a Perpetuity What is the present value of a perpetuity...
eBook
Problem 4-27
Present Value of a Perpetuity
What is the present value of a perpetuity of $400 per year if
the appropriate discount rate is 10.92%? Round your answer to the
nearest cent.
$
If interest rates in general were to double and the appropriate
discount rate rose to 21.84%, what would its present value be?
Round your answer to the nearest cent.
$
What is the present value of a constant perpetuity of 25 per year where the required...
What is the present value of a constant perpetuity of 25 per
year where the required rate of return is 5%?
$15,000 is the present value of Perpetuity A which pays $500 at the beginning of each...
$15,000 is the present value of Perpetuity A which pays $500 at
the beginning of each year with the first payment starting today.
$6,834 is the present value of Perpetuity B which pays $550 at the
beginning of each year, with the first payment starting n years
from today. Determine the present value of an annuity-due that
makes payments of $55 each year for n years.
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