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Two perpetuities have the same annual effective interest rate. Perpetuity A pays $ 8 at the end of each year for the first 2 0

Two perpetuities have the same annual effective interest rate. Perpetuity A pays $

8

at the end of each

year for the first

20

years and then $

4

at the end of each year thereafter. Perpetuity B is a perpetuity

due which has a level annual payment of $

6 .

At t

= 0

the PV of A equals the PV of B

.

What is the annual

effective interest rate?

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