Determine the present value of pats payments

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Reference no: EM131361295

A perpetuity immediate has quarterly payments $5000 with a nominal annual interest rate of 4% compounded quarterly. The payments are distributed in the following fashion. Chris and Pat alternate payments for 40 total payments (Chris gets the 1st,3rd,5th...39th and Pat gets the 2nd,4th,6th...40th for 20 payments each) The remaining payments are paid into a foundation.

a) Determine the present value of Pats payments

b) Determine the percent Pat's present value is of the present value of the perpetuity.

Reference no: EM131361295

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