Krishnamurthy has inherited  1,000 a year for next 20 years. First payment being made in one years time. However he is need of money immediately and would like to sell his income to any buyer who would pay him the right price. Assume that the current market rate of interest is 10%.
(a)Â Â Â What should be the right price he should accept?
(b)Â Â How much of his income should he sell if he wants only 2,500 at present.
(c)   If you are interested in buying the income but if you had only  5,000 to invest, what would be your proposal.
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