What is the present value of the following perpetuities?
a. $600 discounted at 7%
b. $450 discounted at 12%
c. $1,000 discounted at 6%
d. $880 discounted at 9%
Answer:
a. PV = $600/.07
PV = $8,571.43
b. PV = $450/.12
PV = $3,750
c. PV = $1,000/.06
PV = $16,666.67
d. PV = $880/.09
PV = $9,777.78
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