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Calculate the present value

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Reference no: EM131075109

What is the value today of a $7,500 payment made in perpetuity assuming a 12% discount rate?

Assume the same perpetuity as above but the payments will not begin for another five years. What is the present value, today, of such a perpetuity?

Use the PV function within Excel to calculate the present value of a 5 year annuity which pays $7,500 per year (starting next year) and with an interest rate of 12%? (Note, as a check, your answer in part (a) minus your answer in part (b) should equal your answer in part (c).

Reference no: EM131075109

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