business finance

[rouzbehh]

4. You have decided to buy perpetuity. The bond makes one payment at the end of every year forever and has an interest rate of 5%. If you initially put $1000 into the bond, what is the payment every year?

[redcrx]

what have you calculated it to be?

you cant just ask for answers to homework, you need to have a grasp on how to work it out.

[rouzbehh]

PV=c/r
1000=c/0.05
1000*0.05=c
c=50

[dr b]

You are correct.