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Math Help - perpetuity- rate of interest

  1. #1
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    perpetuity- rate of interest

    Perpetuity X has level payments of $300 at the end of each year. Perpetuity Y also has end of year payments but they begin at $45 and increase by $45 each year. Find the rate of interest which will make the difference in present values between these two perpetuities a maximum. [Hint: Calculus
    needed].

    i do not understand how to do this.. where do i start?
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  2. #2
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    Quote Originally Posted by mathlovet View Post
    Perpetuity Y also has end of year payments but they begin at $45 and increase by $45 each year.
    Check this and this out and let's see if you get any ideas.
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