Asked by aaa-17

Suppose the borrowing rate r_B = 10\%r
B

=10% compounded annually. However,

the lending rate (or equivalently, the interest rate on deposits) is

only 8\%8% compounded annually. Compute the difference between the upper

and lower bounds on the price of an perpetuity that pays \(A = 10,000\\)$ per

year.

Please submit your answer rounded to the nearest dollar so if your answer is 23,456.78923,456.789 then you should submit an answer of 2345723457

Answers

Answered by Nikita Iyer
25000
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