Present value of perpetuity-present value of annuity

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Reference no: EM131955939

1. Present Value of a Perpetuity A perpetuity pays $190 per year and interest rates are 6.9 percent. How much would its value change if interest rates increased to 9.4 percent?

$475.00 decrease

$732.34 decrease

$732.34 increase

$475.00 increase

2. Present Value of an Annuity What is the present value of a $400 annuity payment over 6 years if interest rates are 9 percent?

$670.84

$2,013.18

$238.51

$1,794.37

Reference no: EM131955939

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