Question
You just learnt that you are going to receive $300 a year forever. In addition, this amount will increase at the rate of 5% forever.
You just learnt that you are going to receive $300 a year forever. In addition, this amount will increase at the rate of 5% forever. However, these payments will not begin until four years from today. What is the present value of these payments assuming a discount rate of 6%?
A. $4,198.10 B. $23,762.81 C. $25,188.58 D. $30,000.00
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Investments Analysis and Management
Authors: Charles P. Jones
12th edition
978-1118475904, 1118475909, 1118363299, 978-1118363294
