Business, 25.09.2020 01:01 Ksouth13

A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $1000. Each year after that, on the anniversary of the last payment you will receive a payment that is 8% larger than the last payment. This pattern of payments will go on forever. If the interest rate is 12% per year, What is today’s value of the bequest? What is the value of the bequest immediately after the first payment is made?

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A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and...