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Assume, you will receive rent payments over a time period of 99 years. For the first 44 years, you will receive a rent of $444 at the beginning of each year. For the next 55 years thereafter you will receive $222 at the end of each year. Assuming a discount rate of 2%, calculate the net present value of this income stream.

(a) Employing the equation for identical payments over a limited time period, show how you would alter this equation applied to this problem.

(b) Calculate the NPV of the payments.

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Darryn D'Souza
Darryn D'SouzaLv10
28 Sep 2019

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