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The answer is (a)138.87, (b)370.3, I need steps and explaination 2.38 (a) Find the present value of a perpetuity of $1 at time 0, $2
The answer is (a)138.87, (b)370.3, I need steps and explaination
2.38 (a) Find the present value of a perpetuity of $1 at time 0, $2 at time 3, $3 at time 6, $4 at time 9, ... at an effective rate of interest of 3%. (Hint: Use the result in Exercise 2.25.) (b) Hence, find the present value of a perpetuity which pays $1 at the end of the 3rd, 4th and 5th year, $2 at the end of the 6th, 7th and 8th year, $3 at the end of the 9th, 10th, 11th year and so on, at an effect rate of interest of 3%. 2.38 (a) Find the present value of a perpetuity of $1 at time 0, $2 at time 3, $3 at time 6, $4 at time 9, ... at an effective rate of interest of 3%. (Hint: Use the result in Exercise 2.25.) (b) Hence, find the present value of a perpetuity which pays $1 at the end of the 3rd, 4th and 5th year, $2 at the end of the 6th, 7th and 8th year, $3 at the end of the 9th, 10th, 11th year and so on, at an effect rate of interest of 3%Step by Step Solution
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