Mary is going to receive a 30-year annuity of $8,500. Nancy is going to receive a perpetuity

Question:

Mary is going to receive a 30-year annuity of $8,500. Nancy is going to receive a perpetuity of $8,500. If the appropriate interest rate is 8 percent, how much more is Nancy’s cash flow worth? Year Cash Flow $1,900 2,300 4,500 5,100 1 3 4

Annuity
An annuity is a series of equal payment made at equal intervals during a period of time. In other words annuity is a contract between insurer and insurance company in which insurer make a lump-sum payment or a series of payment and, in return,... Perpetuity
Perpetuity refers to payments that are made without an end or maturity date. A perpetuity is classified as an annuity, which is something that earns a dividend or receives a payment at a regularly scheduled interval, generally yearly. So, how...