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What is the value of the growing perpetuity

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Reference no: EM132832901

Question - Uncle Bob passed away but in his will he had promised to leave you an annuity that will pay $1000 next year and the annuity will grow at an annual rate of 4%. The payments are expected to go on indefinitely and the interest rate is 12%. What is the value of the growing perpetuity?

a. $4,167.00

b. $6,250.00

c. $15,000.00

d. $12,500 .00

e. $8,333.33

Reference no: EM132832901

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