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Please answer ALL PARTS OF questions. If answers are clear and correct I will leave positive feedback! Thank you! 2. Perpetuities Aa Aa Perpetuities are
Please answer ALL PARTS OF questions. If answers are clear and correct I will leave positive feedback! Thank you!
2. Perpetuities Aa Aa Perpetuities are also called annuities with an extended, or unWmited, life. Based on your understanding of perpetuities, answer the following questions. Which of the following are characteristics of a perpetuity? Check all that apply. In a perpetuity, returns-in the form of a series of identical cash flows-are ea med. A perpetuity continues for a fixed time period. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely into the future. The present value of a perpetuity is calculated by dividing the amount of the payment by the investor's opportunity interest rate. Your grandfather wants to establish a scholarship in his father's name at a local university and has stipulated that you will administer it. As you've committed to fund a $10,000 scholarship every year beginning one year from tomorrow, you'll want to set aside the money for the scholarship immediately. At tomorrow's meeting with your grandfather and the bank's representative, you will need to deposit can fund the scholarship forever, assuming that the account will eam 5.00% per annum every year. (rounded to the nearest whole dollar) so that you Oops! The bank representative just reported that he misquoted the available interest rate on the scholarship's account. Your account should eam 4.25%. The amount of your required deposit should be revised to This suggests there is value of the perpetuity. relationship between the interest rate eamed on the account and the present Flash Player MAC 30,0,0,113Step by Step Solution
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