Present values of the two serious of payments are equal

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Reference no: EM131326875

You are given two series of payments. Series A is a perpetuity with payments of 1 at the end of each of the the first 2 years, 2 at the end of each of the next 2 years, 3 at the end of each of the next 2 years, and so on. Series B is perpetuity with payments of K at the end of the next 3 year, and so on. The present values of the two serious of payments are equal. Assume that i = 5%. Calculate K.

Reference no: EM131326875

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