Q373
Payment if it is divided with interest rate will be formula of
A.
future value of perpetuity
B.
present value of perpetuity
AnswerC.
due perpetuity
D.
deferred perpetuity
Answer: Option B
Solution
Answer: Option B
Solution:
Payment if it is divided with interest rate will be formula of present value of perpetuity. A perpetuity is a type of annuity that receives an infinite amount of periodic payments. An annuity is a financial instrument that pays consistent periodic payments. As with any annuity, the perpetuity value formula sums the present value of future cash flows.