Question
At an annual effective rate of interesti , the following 2 payment streams have equal present values. (i)$370 paid at the end of each year
At an annual effective rate of interesti
, the following 2 payment streams have equal present values.
(i)$370 paid at the end of each year for 14 years.
(ii) A 14-year deferred perpetuity-immediate of$185 per year (i.e. first payment at time 15).
Find the value closest to the effective annual rate of interest.
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Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
10th Edition
538482109, 1133711774, 538482389, 9780538482103, 9781133711773, 978-0538482387
