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9. Two perpetuities have the same annual effective interest rate. Perpetuity A pays $8 at the end of each year for the first 20 years
9. Two perpetuities have the same annual effective interest rate. Perpetuity A pays $8 at the end of each year for the first 20 years and then $4 at the end of each year thereafter. Perpetuity B is a perpetuity due which has a level annual payment of $6. At time t = 0, the present value of perpetuity A is equal to that of perpetuity B. What is the effective annual interest rate i? Less than 3.6% A At least 3.6%, but less than 3.8% At least 3.8%, but less than 4.0% At least 4.0%, but less than 4.2% 4.2% or more
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