Vicky wants to purchase a perpetuity paying $100 per

jagguarpaw January 24, 2017 0 Comments

Question: Vicky wants to purchase a perpetuity paying $100 p…

Vicky wants to purchase a perpetuity paying $100 per year with the first payment due at the end of year 11. She can purchase it by either:
-paying $90 per year at the end of each year for 10 years, or
-paying K per year at the end of each of the first 5 years and nothing for the next 5 years.
Calculate K.