Answered: A bank will pay you $100 a year for…

A bank will pay you $100 a year for your lifetime if you deposit $2,500 in the bank today. If you plan to live forever, what interest rate is the bank paying?

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

ChapterA: Appendix - Time Value Of Cash Flows: Compound Interest Concepts And Applications

Section: Chapter Questions

Problem 11E

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Question

A bank will pay you $100 a year for your
lifetime if you deposit $2,500 in the bank today.
If you plan to live forever, what interest rate is
the bank paying?

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