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?

asked Apr 10, 2021 108k views

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2 votes

Answer:

$40,000

Step-by-step explanation:

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

Dreanmer answered Apr 14, 2021

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