Question

(Related to Checkpoint​ 6.4) ​ (Present value of a perpetuity​) What
is the present value of a ​$

4,500 perpetuity discounted back to the present at

13 ​percent?

Answer 1

The present value of $4,500 perpetuity discounted at 13% is $34,615.38.

What is the present value of perpetuity?

A perpetual annuity is a series of equal and indefinite cash flows.

The formula for calculating the present value of a perpetuity is:

Periodic cash flow/interest rate

Data and Calculations:

Perpetual annuity = $4,500

Discount rate = 13%

Present value of the perpetuity = $34,615.38 ($4,500/0.13)

Thus, the present value of $4,500 perpetuity discounted at 13% is $34,615.38.

Learn more about perpetuities at https://brainly.com/question/24261067

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