#3

Problem 3 A perpetuity consists of monthly payments. The payment pattern follows a repeating 12-month cycle of eleven payments of 1 each followed by a payment of 2. The effective monthly interest rate is j. Show that the present value of the perpetuity valued one month before the first payment is (1 + i ). Problem 3 A perpetuity consists of monthly payments. The payment pattern follows a repeating 12-month cycle of eleven payments of 1 each followed by a payment of 2. The effective monthly interest rate is j. Show that the present value of the perpetuity valued one month before the first payment is (1 + i )