Problem:
You are evaluating a growing perpetuity product from a large financial services firm. The product promises an initial payment of $24,000 at the end of this year and subsequent payments that will thereafter grow at a rate of 0.02 annually.
Required:
Question: If you use a discount rate of 0.08 for investment products, what is the present value of this growing perpetuity?
Note: Provide support for your rationale.