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26. Let i represent the interest rate per period (assume it is forever constant). Further, let A represent the present value today of a perpetuity
26. Let i represent the interest rate per period (assume it is forever constant). Further, let A represent the present value today of a perpetuity that pays PMT dollars beginning at the end of period 1 (i.e., the first payment of this perpetuity is at the end of time period 1) and let B represent the present value today of a perpetuity that pays PMT dollars beginning at the end of period n+1 (i.e., the first payment of this perpetuity is at the end of time period n+1). What is the present value today, expressed in terms of A and B, of an n-period ordinary annuity that pays PMT dollars beginning at the end of period 1 (i.e., the first payment of this ordinary annuity is at the end of time period 1 and the last payment is at the end of period n )
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