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You are promised $1,000 every year for the rest of your life. If your required return is 2.5%. What is the value of this perpetuity?
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You are promised $1,000 every year for the rest of your life. If your required return is 2.5%. What is the value of this perpetuity?

User Gratsby
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1 Answer

2 votes

Answer:

$40,000

Step-by-step explanation:

Present value = payment / interest rate = 1000 / 0.025 = $40,000

User Dreanmer
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