An investment offers $6405 per year for 15 years, with the first payment occurring one year from now. If the required return is 8.2 percent, what would the value be if the payments occurred forever? (Round final answer to the nearest dollar amount.
Added by Carlos C.
Step 1
Calculate the present value of the 15-year annuity using the formula for the present value of an annuity: PV = C * [(1 - (1 + r)^-n) / r] where PV is the present value, C is the annual cash flow, r is the required return, and n is the number of periods. PV = Show more…
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