What is todays value of the bequest

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A rich relative has bequeathed you a payment of $1,000 one year from now. Each year after that, you will receive a payment on the anniversary of the last payment that is 8% larger than the previous payment. This pattern of payments will go on forever. If 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: EM13257227

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