Question

What is the present value of a $679 perpetuity discounted back

to the present at 4.53 percent.
The answer should be calculated to two decimal
places.

Answer 1

To calculate the present value of a perpetuity, we can use the formula:

PV = PMT / r

where PV is the present value, PMT is the constant payment, and r is the interest rate.

In this case, the constant payment is $679, and the interest rate is 4.53%.

So, substituting these values into the formula, we get:

PV = $679 / 0.0453

PV = $14,995.59

Therefore, the present value of the perpetuity is $14,995.59, rounded to two decimal places.