Answered step by step
Verified Expert Solution
Question
1 Approved Answer
7. You receive an email informing you that a long lost relative has died and left behind a substantial fortune of Napoleonic war era perpetuities.
7. You receive an email informing you that a long lost relative has died and left behind a substantial fortune of Napoleonic war era perpetuities. The perpetuities promise to pay 50 000 per year (your first payment being in one years time). If you know that the present value of the bonds is 526 315.8 and that the 5-year annuity factor is 3.89, what would be the value today of a perpetuity offering to pay 100 000 at the end of each year starting in 5 years time? (answer in ) a. 526 316 b. 663 632 c. 389 000 d. 486 291 e. 764 389
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started