Is it worth paying 40000 for a perpetual annuity of 1500, Microeconomics

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Is it worth paying 40000 for a perpetual annuity of 1500

Question: 1. What is the maximum price you would pay for a perpetual annuity that will commence annual payment of £400 in 12 months' time if the market rate of interest is 13%?

2. Is it worth paying £40,000 for a perpetual annuity of £1,500 per annum, commencing payments in 12 months' time, if money can be invested elsewhere at 3%?

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Microeconomics: Is it worth paying 40000 for a perpetual annuity of 1500

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Microeconomics: Is it worth paying 40000 for a perpetual annuity of 1500

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