A perpetuity-immediate pays 100 per year immediately after


Question: A perpetuity-immediate pays 100 per year. Immediately after the 5th payment, the perpetuity is exchanged for a 25-year annuity immediate that pays X at the end of the first year, with subsequent annual payment of 8% larger than the preceding payment. The annual effective rate of interest is 8%. Calculate X.

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Finance Basics: A perpetuity-immediate pays 100 per year immediately after
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