Question
The present value of an increasing perpetuity due with quaterly payments $100, $200, $300, etc. is three times the present value of a perpetuity immediate
The present value of an increasing perpetuity due with quaterly payments $100, $200, $300, etc. is three times the present value of a perpetuity immediate with level quaerly payments $500. If both perpetuities use the same annual effective interest ratei, find the present value of the second perpetuity? (with level payments)
I'm getting stuck on what the formulas are. I have read my textbook and written all my formulas down. However, for perpetuties I'm only given the formula for a perpetuity due and I need to find the perpetuity immediate. Also, i need to find the increasing perpetuity due but am given the formula for increasing perpetuity immediate.
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