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belka [17]
3 years ago
9

You will pay $7,000 now to purchase a perpetuity which will pay you and your heirs $340 at the end of each year, forever. What i

s the rate of return on this perpetuity?
Business
2 answers:
Katen [24]3 years ago
5 0

Answer:

4.86%

Explanation:

Interest rate of a perpetuity = amount / present value

$340 / $7,000 = 0.048571 = 4.86%

I hope my answer helps you

Naddika [18.5K]3 years ago
4 0

Answer:

4.86%

Explanation:

Interest rate of a perpetuity = amount / present value

$340 / $7,000 = 0.048571 = 4.86%

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