Question
*PLEASE NO EXCEL! ONLY FORMULAS!* Alex buys a perpetuity-immediate with annual (end-of-year) payments. At an effective annual interest rate of 9.2%, the perpetuity has a
*PLEASE NO EXCEL! ONLY FORMULAS!*
Alex buys a perpetuity-immediate with annual (end-of-year) payments. At an effective annual interest rate of 9.2%, the perpetuity has a present value of $167.50. Each of the first 5 payments is equal to $10. Starting from the 6th payment, the payments start to increase, the current year payment is g% larger than the preceding year payment, where 0 < g < 9.2% (thus, the 6th payment is $10(1 + g)). Determine the value of g.
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Personal Finance A Practical Approach
Authors: Jane King, Mary Carey
1st Edition
0199668833, 9780199668830
