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John Moffat.
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lokeshdh00
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Hi, sir hope you are well. Your lectures were awesome.as they clear concept withing least possible time.
I had a little problem in distinguishing the following term in perpituities.
taking the same example in lectures- intrest rate = 12 % and 5000 usd receivable in 1 year and thereafter in perputity.
sol.- 5000×1/0.12 = usd 41667 so which one is present value , is it the some of 5000 each year till forever or the 41667. 41447 looks more obvious but still want to be sure of it.
Thank you
lokeshdh00
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I follwed notes found that present value is 41667 as P = A x 1/r
John Moffat
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Yes – the present value is 41,667 🙂
lokeshdh00
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