The present value of a perpetuity is equal to the payment on the annuity, PMT, divided bythe interest rate, I : PV = PMT/I. What is the future value of a perpetuity of PMT dollars peryear? (Hint: The answer is infinity, but explain why.)
The present value of a perpetuity is equal to the payment on the annuity, PMT, divided bythe interest rate, I : PV = PMT/I. What is the future value of a perpetuity of PMT dollars peryear? (Hint: The answer is infinity, but explain why.)
Chapter5: The Time Value Of Money
Section: Chapter Questions
Problem 3QTD
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The present value of a perpetuity is equal to the payment on the
the interest rate, I : PV = PMT/I. What is the
year? (Hint: The answer is infinity, but explain why.)
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