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A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $2,000. Each year afterthat, you
A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be
$2,000. Each year afterthat, you will receive a payment on the anniversary of the last payment that is2% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is
13% per year.
a. What istoday's value of thebequest?
b. What is the value of the bequest immediately after the first payment ismade?
a. What istoday's value of thebequest?
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