6. Perpetuities Perpetuities are also called annuites with an extended or unlimited life. Based on your understanding of perpetuitles, answer the following questions, Which of the following are characteristics of a perpetuity? Check all that apply. The value of a perpetuity cannot be determined. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the discounted value of its more distant (in the future) cash flows. A perpetuity is a stream of unequal cash flows. The value of a perpetuity is equal to the sum of the present value of its expected future cash flows. A local bank's advertising reads: "Give us $45,000 today, and we'll pay you $800 every year forever. If you plan to live forever, what annual interest rate will you earn on your deposit? O 1.42% O 1.78% 2.49% O 1.60% Oops! When you went in to make your deposit, the bank representative said the amount of required deposit reported in the advertisement was incorrect and should have read $67,500. This revision, which will the interest rate earned on your deposited funds, will adjust your earned interest rate to life. Based on your understanding of perpetuities, answer the followir the following are characteristics of a perpetuity? Check all that apply. The value of a perpetuity cannot be determined. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less by the disce -alue of its more distant (in the future) cash flows. perpetuity is a stream of unequal cash flows. The value of a perpetuity is equal to the sum of the present value of its expected future cash flows. k's advertising reads: "Give us $45,000 today, and we'll pay you $800 every year forever." If you plan to live forever, what a earn on your deposit? .42% .78% .49% -60% increase reduce n you went in to make your deposit, the bank represer nd should have read $67,500. This revision, which will the amount of required deposit reported in the advertisemer the interest rate earned on your deposited funds, will ad erest rate to Which of the following are characteristics of a perpetuity? Check all that apply. The value of a perpetuity cannot be determined. The current value of a perpetuity is based more on the discounted value of its nearer (in time) cash flows and less value of its more distant (in the future) cash flows. A perpetuity is a stream of unequal cash flows. The value of a perpetuity is equal to the sum of the present value of its expected future cash flows. A local bank's advertising reads: "Give us $45,000 today, and we'll pay you $800 every year forever." If you plan to live fore rate will you earn on your deposit? 1.42% 0 1.78% O 2.49% 1.25% 1.60% 1.01% 1.19% Oops! When you went 1.13% incorrect and should ha your deposit, the bank representative said the amount of required deposit reported in the a 67,500. This revision, which will the interest rate earned on your deposited fu earned interest rate to
