Present value of a perpetuity

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Your uncle would like to have enough money saved after retirement such that he and his spouse can receive $250,000 per year in perpetuity. How much would he need to have saved at the time of his retirement in order to achieve this goal? (Assume that the perpetuity payments start one year after the date of his retirement. The annual interest rate is 12.5%. Hint: the present value of a perpetuity is CF/i.. Show work in the space below.

Reference no: EM132577892

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