What is the present value of a perpetuity

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a) What is the Present Value of a perpetuity of $100 per year if the first payment will be received one year from now and the appropriate interest rate is 8% per year?

b) Continuing the previous problem, what is the present value of this perpetuity if the first payment of $100 per year will not be received until five years from now, assuming that subsequent $100 payments will still occur once a year thereafter?

Reference no: EM131324783

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