Examples Example 6.6 What is the present value of $600 perpetuity at 7% discount rate PV=600/0.07=8751.43.
{"Image DocumentName": "ExamplesExample 6.6 What is the present value of  600 perpetuity at 7% discount rate? PV=600/0.07=", "Image ImageDescription": "If you decide to rent an apartment with a fixed rent of  2,000 per month and live there forever (subletting it to your children after you die), how much is this apartment worth if the mortgage rate is 6% per year (Ignore tax, liquidity and other concerns). The present value of paying  2000 per month forever at 6% rate per year is: PV=2000/(0.06/12)=400, times your rent is about the house value. PV =  600 \u00f7 .07 =  8, FIN3000, Liuren Wu.", "Image XResolution": "37", "Image YResolution": "37", "Image ResolutionUnit": "Pixels/Centimeter", "Image Software": "SlidePlayer", "Image YCbCrPositioning": "Centered"}