(2) NPV

Assume you will get 20 rental payments paid over 20 years at the beginning of each year. Initially the rent equals R=$40; but it will grow at a rate of g=1% per year. The NPV of this income stream equals $295.63. What is your discount rate? Provide your answer as percentage with two decimals, e.g., 1.23% (or 0.0123). First set up the equation (show the equation). You can then approximate in Excel.