In: Finance
A perpetuity costs 693.16 and makes end-of-month payments. The
perpetuity pays 1 at the end of each month of year 1, 2 at the end
of each month of year 2, ...., 10 at the end of each month of year
10. After year 10, the payments remain constant at 10. Calculate
the annual effective interest rate.
(a) 8.30%
(b) 9.38%
(c) 10.47%
(d) 11.57%
(e) 12.68%
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