Purchase perpetuity paying

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Reference no: EM131865869

Victor wants to purchase a perpetuity paying 210 per year with the first payment due at the end of year 17. He can purchase it by either:

(i) paying 120 per year at the end of each year for 16 years; or

(ii) paying K per year at the end of each year for the first 6 years and nothing for the next 10 years.

Calculate K. [3.d-f #21]

Reference no: EM131865869

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