Q Search Ch 05: Assignment - Time Value of Money

Q Search t Ch 05: Assignment - Time Value of Money Back to Assignment Attempts: Average: / 7 9. Perpetuities Perpetuities are also called annuities with an extended, or unlimited, life. Based your understanding Of perpetuities; answer the following questions. Which Of the following are characteristics Of a perpetuity? Check all that apply. The present value Of a perpetuity is calculated by dividing the amount Of the payment by the investor's opportunity interest rate. A perpetuity continues for a fixed time period. In a perpetuity, returnsin the form Of a series of identical cash flowsare earned. A perpetuity is a series of regularly timed, equal cash flows that is assumed to continue indefinitely the future. A bcal bank's advertising reads: "Give us $35,000 and well pay you $800 every year forever." If you plan to live forever, what annual interest rate Will you earn on your deposit? 0 1.839' 0 3.21% 0 2.75% 0 2.29% OOPs' When you went in to make your deposit, the bank representative said the amount Of required deposit reported in the advertisement was incorrect and should have read $52,500, This revision, which "ill the interest rate earned on your deposited funds, will adjust your earned interest rate to