Why not static annual rate choosen
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Here the payment is annuity but the funds will be compounded semi annually. So our effective rate will be different from stated rate. So first we convert the stated rate into effective rate and then find the pv of perpetuity. Please check the complete solution i have also provided alternate method to find pv today
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We are using EAR because payment is coming annually but interest is compounding semi annually.So we will find out EAR first from the SAR and then use it in the sum.