What is today value of the bequest

Reference no: EM132073638

Question: A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $1,000. Each year after? that, you will receive a payment on the anniversary of the last payment that is nbsp 8% larger than the last payment. This pattern of payments will go on forever. Assume that the interest rate is 12% 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?

Reference no: EM132073638

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