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t and f 1. The fut ure va lue of a per petuity is obtai ned by divi ding the cas h flo w by
t and f
1. The fut ure va lue of a per petuity is obtai ned by divi ding the cas h flo w by the rate.
2.If the nom inal rate is 12% comp ounded sem i-annually, the ann ual % rate is high er than the effec tive annu al r ate.
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