How do you calculate (mathematically) the present value (PV) of a(n):
(a) perpetuity
(b) annuity
(c) growing perpetuity
(d) growing annuity
Answer:
(a) PV of a perpetuity = Image
(b) PV of an annuity = C × Image Image
(c) PV of a growing perpetuity = Image
(d) PV of a growing annuity = C × Image Image
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