What is today value of the bequest

Reference no: EM132073601

Question: A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $5,000. Each year after that, you will receive a payment on the anniversary of the last payment that is 2% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 15% per year. a. What is today's value of the bequest? b. What is the value of the bequest immediately after the first payment is made?

a. What is today's value of the bequest? Today's value of the bequest is (Round to the nearest dollar.)

b. What is the value of the bequest immediately after the first payment is made? The value of the bequest immediately after the first payment is made is $. (Round to the nearest dollar.)

Reference no: EM132073601

Questions Cloud

Decision analysis case study : Review "Decision Analysis Case Study: Valley of the Sun Reviews" for this topic's case study, a proposal to change the faculty

Calculate abc accounts receivable at december : For 2014, ABC Company estimates bad debt expense at 1% of credit sales. Calculate ABC's accounts receivable at December 31, 2014

Calculate the npv of the given project : RightPrice Investors, Inc., is considering the purchase of a $379,000 computer with an economic life of four years. The computer will be fully depreciated over.

Compare the financial statements of two organizations : For this assignment you will be asked to compare the financial statements of two organizations.

What is today value of the bequest : A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $5,000.

Process of performance appraisal by subordinates : a) How do you evaluate the workers' appraisal in this case? b) Do you suggest any techniques to avert politics creeping into the process of performance appraisa

Cover income taxes and other mandatory government deductions : His employer withholds 30% to cover income taxes and other mandatory government deductions (e.g. EI)

Prepare the journal entry for the inventory acquisition : Richards Inc. pays a vendor cash of $16,050 at the beginning of the year for goods that Richards will ultimately include in its inventory.

What is the probability that both are of the same color : What is the probability that both are of the same color - In how many ways you can choose 8 of 32 playing cards not considering their order

User Account

All Pages