Find the value of $475 per quarter in perpetuity if the interest rate is 9 percent....

Find the value of $475 per quarter in perpetuity if the interest rate is 9 percent. Do not write any symbol ($, #, &,...). Round your answer to the nearest one-hundredth percentage point. For example, write 1125.34 for $1,125.34

Solutions

Expert Solution

Present Value of Perpetuity
PV=A/r-g

PV= Present Value
A= Annuity
r= interest rate
g= growth rate


=$475/0.09

=$5,277.780

jeff jeffy answered 2 years ago

Next > < Previous

Related Solutions

What is the present value of $10,000 per year in perpetuity at an annual interest rate of 10 percent if the perpetuity starts in year=4?

What is the present value of $10,000 per year in perpetuity at an annual interest rate of 10 percent if the perpetuity starts in year=4? $10,000 $75,131.48 $1,000 $68,301.35 $82,402.36

Given an interest rate of 6.95 percent per year, what is the value at Year 9...

Given an interest rate of 6.95 percent per year, what is the value at Year 9 of a perpetual stream $3,700 payments that begin at Year 20? (Do not round intermediate calculations and round your answer to 2 decimal places , e.g., 32.16.)

Find the present value of the given perpetuity. $43200 per year at the rate of...

Find the present value of the given perpetuity. $43200 per year at the rate of 6% yearly

a. What is the time 0 value of a $500 perpetuity at an interest rate of...

a. What is the time 0 value of a $500 perpetuity at an interest rate of 4.5 percent? b.What is the value of the above assuming that it is a perpetuity due? That is, the first payment occurs at time 0 and continues forever. c.What is the time 0 value of a $500 deferred perpetuity that makes its first payment 6 years from now? Assume a 4.5 percent interest rate. d. Given an interest rate of 4.5 percent per year,...

What is the present value of a $600 perpetuity if the interest rate is 4%? If...

What is the present value of a $600 perpetuity if the interest rate is 4%? If interest rates doubled to 8%, what would its present value be? Round your answers to the nearest cent. -Present value at 4%: $ -Present value at 8%: $

Given a discount rate of 13 percent, what is the present value of a perpetuity of...

Given a discount rate of 13 percent, what is the present value of a perpetuity of $1,400 per year if the first payment does not begin until the end of year 10?

If 38,300 dollars is invested at an interest rate of 7 percent per year, find the...

If 38,300 dollars is invested at an interest rate of 7 percent per year, find the interest earned for the investment at the end of 5 years for the following compounding methods. (a) Annual: (b) Semiannual: (c) Monthly: (d) Daily:

At an annual interest rate of i, i ≥ 0, the present value of a perpetuity...

At an annual interest rate of i, i ≥ 0, the present value of a perpetuity paying 10 at the end of each three-year period, with the first payment at the end of year 3, is 34.21. At the same annual effective rate of i, the present value of a perpetuity paying 1 at the end of each four-month period, with the first payment at the end of four months, is X. Calculate X.

What is the present value of a perpetuity of $80 per year if the discount rate...

What is the present value of a perpetuity of $80 per year if the discount rate is 11%?

Given an interest rate of 9.5 percent per year, what is the value at date t...

Given an interest rate of 9.5 percent per year, what is the value at date t = 5 of a perpetual stream of $900 payments with the first payment at date t = 15? A.4102.21 B. 9573.68 C. 4269.96 D. 4185.933 E.3822.77

Subjects