You are set to receive an annual payment of 1330$ per year for ever. Assume the...

You are set to receive an annual payment of 1330$ per year for ever. Assume the interest rate is 15%. What is the future value of this amount?

a) 1156.52

b)1130.50

c)1564.71

d)1529.50

Solutions

Expert Solution

D) The given problem is an example of perpetuity as the annual payment is paid per year for ever.

Future value = $1330/(1+0.15)

=1156.52$

jeff jeffy answered 2 years ago

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