PYTHON A perpetuity pays a coupon value of C each and every period forever. Given a discount rate of r, the value of a perpetuity is given by V=∑t=1∞C(1+r)t Thus, the value of a perpetuity is described by an infinite series. Mathematically, this summand can be reduced to V=C/r We'll refer to the first equation above as the "summation formula" and the second equation as the "shortcut formula". That is, the summation formula uses an infinite series, whereas the shortcut formula expresses the value of a perpetuity as simply the ratio of the coupon value to the discount rate. Create a function that returns the value of a perpetuity using the shortcut formula. def shortcut_formula(C, r):
PYTHON
A perpetuity pays a coupon value of C each and every period forever. Given a discount rate of r, the value of a perpetuity is given by V=∑t=1∞C(1+r)t
Thus, the value of a perpetuity is described by an infinite series. Mathematically, this summand can be reduced to V=C/r
We'll refer to the first equation above as the "summation formula" and the second equation as the "shortcut formula". That is, the summation formula uses an infinite series, whereas the shortcut formula expresses the value of a perpetuity as simply the ratio of the coupon value to the discount rate.
Create a function that returns the value of a perpetuity using the shortcut formula.
def shortcut_formula(C, r):
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