You have just received an inheritance from a rich relative. The first payment will occur in one…

You have just received an inheritance from a rich relative. The first payment will occur in one year and will be $1000. Assuming an interest rate is 12% per year, what is the value of your inheritance today if:

a) You get the same amount every year forever?

b) Your payment increases at a rate of 8% forever?

c) You get the same amount every year only for the next 20 years?

d) You get the payment for the next 20 years but the payment increases at a rate of 8%?

 

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