Present Value of a Growing Perpetuity
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I am evaluating a growing perpetuity product from a large financial services firm. The product promises an initial payment of $24,000 at the end of this year and subsequent payments that will thereafter grow at a rate of 0.02% annually. If you use a discount rate of 0.07% for investment products, what is the present value of this growing perpetuity?
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Solution Summary
This solution explains the present value of a specific growing perpetuity.
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Present value of this growing perpetuity:
= Payment for the ...
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