Excel solution is preferred.

Ada, Betty and Clara receive an inheritance in the form of a perpetuity, that is, as a series of level payments of $4,000 at the end of every year, forever. They decide to let Ada start receiving the payments first, followed by Betty and finally Clara, such that they receive the same present value at an annual interest of 4%. (a) How many regular payments should Ada receive and how large is the final irregular payment? (b) Consider Clara. When will she receive her first payment and what will be its amount? (c) When will Betty receive her first and last payments and what will be the amounts of these payments? Hint: The present value of the inheritance is the present value of a $4,000,4%, perpetuity (this should come out as $100,000). Start with Ada, she receives $100,000/3 as an present value of an annuity immediate with $4,000 payments at 4%, solve for term n, the regular number of payments and find the irregular payment at time n +1. Next consider Clara, she receives a $,4000 perpetuity whose present value is $100,000/3 when discounted to time zero from the time of her first payment t, i.e. 4,000vali, solve for t. Clara's first regular payment will occur at timet + 1. Her first irregular payment at time t + the perpetuity starting at time t +1 need to add up to $100,000/3 when calculated at time zero. Now you can figure out Betty's payment pattern, sandwiched between Ada and Clara. ANS: (a) 10, $1,369.73; (b) 29, $3,955.05; (c) 11, 29, $2,630.27, $44.95