Lim V 1 1246858 r ri I fr

which is 78% of the entire present value, compared to the error of 2.1% if the interest rate were 8% (from the calculation above).

Example 3.19 Suppose that a stream of equal payments of amount $ I 0.000 per yea^ is to continue in perpetuity. At the interest rate of 6% compute

(i) (he present value of this entire stream of benelils

(ii) (he present value of the benefits beginning at the end of (he 50th year

(iii) the present value of the first 50 years of benefits

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