What is the present worth difference between an investment of $10,000 per year for 50 years and an investment of $10,000 per year forever at an interest rate of 10% per year?
What will be an ideal response?
PW50 = 10,000(P/A,10%,50)
= 10,000(9.9148) (by factor)
= $99,148
CC = AW/i = 10,000/0.10
= $100,000
Difference = 100,000 – 99,148
= $852
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