What amount of money deposited 35 years ago at 8% interest would provide a perpetual payment of $10,000 a year beginning this year? Solution: 1. The amount of money needed now to begin the perpetual payments is 2. The amount of money that would need to have been deposited years ago is

What amount of money deposited 35 years ago at 8% interest would provide a perpetual payment of $10,000 a year beginning this year? Solution: 1. The amount of money needed now to begin the perpetual payments is 2. The amount of money that would need to have been deposited years ago is

Corporate Fin Focused Approach

5th Edition

ISBN:9781285660516

Author:EHRHARDT

Publisher:EHRHARDT

Chapter4: Time Value Of Money

Section4.17: Amortized Loans

Problem 1ST

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Question

What amount of money deposited 35 years ago at 8% interest would provide a perpetual payment of $10,000 a year
beginning this year?
Solution:
1. The amount of money needed now to begin the perpetual payments is
2. The amount of money that would need to have been deposited years ago is

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