Aunt Clarisse has promised to leave you an annuity that will pay £60 next year and grow at an annual rate of 4%.The payments are expected to go on indefinitely and the interest rate is 9%.What
Is the value of the growing perpetuity?
A) £667
B) £693
C) £1,200
D) £1,248
E) None of the above.
Correct Answer:
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