A local bank advertises the following deal: "Pay us $100 at the end of each year for 12years and then we will pay you (or your beneficiaries) $100 at the end of each yearforever." Calculate the present value of your payments to the bank if the interest rate is4.75%. Note: Do not round intermediate c What is the present value of a $100perpetuity deferred for 12 years if the interest rate is 4.75% ? is this a good deal?

A deferred perpetuity involves a stream of regular payments that starts at a certain point in the…

Answered: A local bank advertises the following…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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