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What is todays value of the bequest

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A rich relative has bequeathed you a growing perpetuity. The first payment will occur in a year and will be $1000. Each year after that, you will receive a payment on the anniversary of the last payment that is 8% larger than the last 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: EM13512083

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