C
Confused1985
Member
In the exam solutions it gives the answer to part (iii) as £750m using the perpetuity formula PV = A/(i-g) = 37.5/(0.15-0.1) = £750m but in the block tutorial solutions they give the answer as:
37.5*(1/(1-(1.1/1.15))) = £862.5m.
Why is this?
37.5*(1/(1-(1.1/1.15))) = £862.5m.
Why is this?