PV of a perpetuity
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A perpetuity will make its first payment in ten years. The first payment will be $1,000, and future payments will increase at a 4% annual rate. What is the present value of this investment, assuming a 7% discount rate?
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The solution explains how to calculate the PV of a perpetuity.
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Since the first payment is made in year 10, we can calculate the PV in year ...
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