Suppose you were to receive a perpetual annual payment (perpetuity) of $640 per year. in the following table calculate the present value (PV) of this perpetuity for two different annual rates of discount (i)
|
Rate of Discount
|
Present Value (PV)
|
|
4%
|
________________
|
|
10%
|
________________
|
Based on your calculations, the present value of a given income stream is _________ at the higher interest rate.