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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 is the rate of return on this perpetuity?

Respuesta :

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

Answer:

4.86%

Explanation:

Interest rate of a perpetuity = amount / present value

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

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