What is the present value of perpetuity with first payment

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Reference no: EM132041529

Question: Please answer the following questions:

1) If the discount rate is 9%, then what is the present value of a $200 perpetuity with the first payment in four years? Recompute your answer assuming that the first $200 payment grows at 6% per year forever.

2) What is the present value of a 9-year $400 annuity with the first of the 9 payments today? The discount rate is 4%. Recompute your answer assuming that the first $400 payment grows at 2% per year for the life of the annuity.

Reference no: EM132041529

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