Answer:
The annual payment must you receive in order to earn a 6.5% rate of return on a perpetuity=$104
Explanation:
Given Data:
Cost of perpetuity=$1,600
Rate of return=6.5%=0.065
Required:
The annual payment must you receive in order to earn a 6.5% rate of return on a perpetuity=?
Solution:
Formula:
[tex]Perpetuity=\frac{Payment}{Rate\ of\ Return}[/tex]
[tex]Annual\ payment=Perpetuity*Rate\ of\ Return\\Annual\ payment=\$1,600*0.065\\Annual\ payment=\$104[/tex]
The annual payment must you receive in order to earn a 6.5% rate of return on a perpetuity=$104
