Determine the present value of an annuity that pays out $100 at the end of each year

Question:

Determine the present value of an annuity that pays out $100 at the end of each year
(a) For five years

(b) In perpetuity if the interest rate is 10% compounded annually.

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...

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