Calculate the present value of the following “Perpetuities”. Assume r=20%.
• A “Perpetuity” that only pays you in even years and the payment each year is $100. That is, the you get $100 on year 2, year 4 … and $0 on year 1, year 3… . (Hint: Change the payment period and use a new periodic rate)
• A “Perpetuity” that pays you $300 when the number of year is odd and $400 when the number of year is even. That is $300 on year 1, year 3 … and $400 on year 2, year 4… .