Susan won the lottery today which will pay an annual perpetuity of X, with the first payment occurring five years from today. The perpetuity has a present value of 100,000 based on an annual effective interest rate of 1% for the first ten years and 5% for all years thereafter. Calculate X. A. 4,100 B. 4,224 C. 4,357 D. 4,401 E. 5,696
Susan won the lottery today which will pay an annual perpetuity of X, with the first payment occurring five years from today. The perpetuity has a present value of 100,000 based on an annual effective interest rate of 1% for the first ten years and 5% for all years thereafter. Calculate X. A. 4,100 B. 4,224 C. 4,357 D. 4,401 E. 5,696
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 39P
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Susan won the lottery today which will pay an annual perpetuity of X, with the first payment occurring five years from today.
The perpetuity has a present value of 100,000 based on an annual effective interest rate of 1% for the first ten years and 5% for all years thereafter.
Calculate X.
A. 4,100
B. 4,224
C. 4,357
D. 4,401
E. 5,696
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