At a discount rate of 8 5 percent, find the present value of a perpetual payment of $1,000 per year If the discount rate were lowered to half the size (4 25 percent), what would be the value of the perpetuity ...

From equation 65 we know that the present v ...

At a discount rate of 8.5 percent, find the present value of a perpetual payment of $1,000

Question:

At a of 8.5 percent, find the present value of a perpetual payment of $1,000 per year. If the were lowered to half the size (4.25 percent), what would be the value of the perpetuity?

Discount Rate
Depending upon the context, the discount rate has two different definitions and usages. First, the discount rate refers to the interest rate charged to the commercial banks and other financial institutions for the loans they take from the Federal...