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14. Perpetuities Aa Aa E Perpetuities are also called annuities with an extended, or unlimited, life. Based on your understanding of perpetuities, answer the following
14. Perpetuities Aa Aa E Perpetuities are also called annuities with an extended, or unlimited, life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetu ty? Check all that apply. The present value of a perpetuity is calculated by dividing the amount of the payment by the investor's opportunity interest rate. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. The principal amount of a perpetuity is repaid as a lump-sum amount. In a perpetuity, returns the form of a series of identical cash flows are earned A local bank's advertising reads: "Give us $45,000 today, and we'll pay you $200 every year forever." If you plan to live forever, what annual interest rate will you earn on your deposit? 0.40% O 0.35% O 0.44% O 0.70% oops! When you went in to make your deposit, the bank representative said the amount of required deposit reported the interest in the advertisement was incorrect and should have read $67,500. This revision, which will reduce rate earned on your deposited funds, will adjust your earned interest rate to Increase
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