Calculate k assuming the effective annual interest rate

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Reference no: EM131070732

The first payment of a perpetuity-immediate is 60. Subsequent payments decrease by 1 per year until they reach a level of k. Payments remain constant at k thereafter. The present value of the perpetuity is equal to the present value of a perpetuity immediate paying 44 each year. Calculate k assuming the effective annual interest rate is 5%

Reference no: EM131070732

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