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Consider a perpetuity that pays $5000 per year with the first payment six years from now. One can purchase this perpetuity by making six annual
Consider a perpetuity that pays $5000 per year with the first payment six years from now. One can purchase this perpetuity by making six annual payments of K with the first payment now. The effective annual interest rate on all transactions is 6%. Determine K. 
6. (Bonus problem) Consider a perpetuity that pays $5000 per year with the first payment six years from now. One can purchase this perpetuity by making six annual payments of K with the first payment now. The effective annual interest rate on all transactions is 6%. Determine K
Consider a perpetuity that pays $5000 per year with the first
payment six years from now.
One can purchase this perpetuity by making six
annual payments of K with the first payment now. The effective annual interest
rate on all transactions is 6%. Determine K.
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