Question
Assume the rate of interest is 8% . How much would you need to set aside to provide each of the following? a $1 billion
Assume the rate of interest is 8%. How much would you need to set aside to provide each of the following?
a $1 billion at the end of each year in perpetuity. (Enter your answer in billions rounded to 1 decimal place.)
b A perpetuity that pays $1 billion at the end of the first year and that grows at 4% a year. (Enter your answer in billions rounded to 1 decimal place.)
c $1 billion at the end of each year for 20 years. (Do not round intermediate calculations. Enter your answer in billions rounded to 3 decimal places.)
d $1 billion a year spread evenly over 20 years.
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