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Question 2. On January 1, 2024, you are setting up a perpetuity where you can withdraw $20000 at the end of every quarter where the
Question 2. On January 1, 2024, you are setting up a perpetuity where you can withdraw $20000 at the end of every quarter where the rst withdrawal occurs on March 31, 2024. To do thisI you make an initial deposit of A into an account where interest is compounded at the end of each month at an APR of r. (a) Determine A in terms of r. (b) The terms of the perpetuity change after 10 years, so that intercst is to be compounded continuously at an APR of 1" instead. Determine which of the two following statements is trueI and justify your answer. 0 Statement A: You need to deposit a lump sum into the account at the 10year mark so that you can still receive the quarterly payments of $20000. 0 Statement B: The revised terms of the perpetuity allow you to withdraw more money every quarter without adding any more money into the account
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