question 7 which of the following cannot be calculated? a the interest rate on a perpetuity given the…

question 7 which of the following cannot be calculated? a the interest rate on a perpetuity given the present value and payment amount. b the present value of an annuity due. c the future value of an annuity due. d the future value of a perpetuity. e none of these are correct. 1.5 points

question 7 which of the following cannot be calculated? a the interest rate on a perpetuity given the present value and payment amount. b the present value of an annuity due. c the future value of an annuity due. d the future value of a perpetuity. e none of these are correct. 1.5 points

Answer

Brief Explanations:

The present - value formula for a perpetuity is $PV=\frac{A}{r}$, where $PV$ is the present value, $A$ is the payment amount, and $r$ is the interest rate. Rearranging for $r$ gives $r = \frac{A}{PV}$, so the interest rate on a perpetuity can be calculated given present value and payment amount. The present - value and future - value formulas for an annuity due can be used to calculate their respective values. A perpetuity has no future - value concept in the traditional sense as it continues indefinitely.

Answer:

D. The future value of a perpetuity.