Question
Present value problem: Victoria is considering an investment that will return $1 per year growing at 6% per year forever. At the end of year
Present value problem:
Victoria is considering an investment that will return $1 per year growing at 6% per year forever.
At the end of year 1 she would get $1. At the end of year 2 she would get $1.06 and so on.
What is Victoria's exact present value (year 0) of this investment at an interest rate of 10% per year compounded yearly?
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Financial Markets And Institutions
Authors: Jeff Madura
5th Edition
0324027443, 9780324027440
