DO IT BY BOTH METHODS:

1. Traditional formula.

2. Using Financial Calculator.

(5 marks) A perpetuity-immediate makes the following pattern of payments every 3 years. It pays 3 at t= 1, then 1 at t= 2, then 4 at t = 3. In a list the payments are 3,1,4,3,1,4,3,1,4... and so on. Find the present value of this perpetuity assuming 8% effective interest per year. (5 marks) A perpetuity-immediate makes the following pattern of payments every 3 years. It pays 3 at t= 1, then 1 at t= 2, then 4 at t = 3. In a list the payments are 3,1,4,3,1,4,3,1,4... and so on. Find the present value of this perpetuity assuming 8% effective interest per year