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10-07-2020
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What constant annual cash payment must you receive in order to earn a 6.5% rate of return on a perpetuity that has a cost of $2,500

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Tundexi Tundexi

14-07-2020

Answer:

$162.5

Explanation:

Amount of perpetuity = Annual Payment / Return earned

We need to solve for Annual payment

Hence, Annual payment = Amount of Perpetuity * Return earned

=$2,500 * 6.5 %

=$162.5

The annual cash payment that you must receive is $162.5

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