Your financial planner offers you two different investment plans. Plan 1 is a R3958 annual perpetuity. Plan 2               is a 12 year, R8016 annual annuity. Both plans will make their first payment one year from today. At what               discount rate would you be indifferent (ie same rate) between these two plans?

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
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Your financial planner offers you two different investment plans. Plan 1 is a R3958 annual perpetuity. Plan 2
             
is a 12 year, R8016 annual annuity. Both plans will make their first payment one year from today. At what
             
discount rate would you be indifferent (ie same rate) between these two plans?
             
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