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a. What is the time 0 value of a $500 perpetuity at an interest rate of 4.5 percent? b.What is the value of the above

a. What is the time 0 value of a $500 perpetuity at an interest rate of 4.5 percent?

b.What is the value of the above assuming that it is a perpetuity due? That is, the first payment occurs at time 0 and continues forever.

c.What is the time 0 value of a $500 deferred perpetuity that makes its first payment 6 years from now? Assume a 4.5 percent interest rate.

d. Given an interest rate of 4.5 percent per year, what is the value 3 years from now of a perpetual stream of $500 payments that begins 8 years from now?

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