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What is the present value of a $1,200 payment made every year forever when interest rates are 4.5 percent
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What is the present value of a $1,200 payment made every year forever when interest rates are 4.5 percent

User Noga
by
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1 Answer

1 vote

Answer:

26,666.67

Step-by-step explanation:

A $1,200 payment is made forever

The interest rate is 4.5%

= 4.5/100

= 0.045

Therefore the present value can be calculated as follows

= 1,200/0.045

= 26,666.67

Hence the present value is 26,666.67

User Derwyn
by
5.3k points
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