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​ (Present value of a perpetuity​)  What is the present value of a ​$4,500 perpetuity discounted...

​ (Present value of a perpetuity​)  What is the present value of a ​$4,500 perpetuity discounted back to the present at 14 ​percent?

The present value of the perpetuity is $(...)

Solutions

Expert Solution

The present value of perpetuity is computed using the below formula:

Present value of the perpetuity payment each year= annual payment/discount rate

                                                                                                 = $4,500/0.14

                                                                                                 = $32,142.8571    $32,147.86.

In case of any query, kindly comment on the solution

jeff jeffy answered 11 months ago
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