I need to find the present value of the growing continuously compounded perpetuity. The question is: Suppose you receive a payment of 4,000 one year from now, but in year 2 the payment will have grown by 1.8% to 4,000 times (1 + 1.8/100), and in year 3 it will have grown by another 1.8%, so that you receive 4,000 times (1 + 1.8/100)^2, and so on into perpetuity. Note that this is compound growth, not linear.
Given an interest rate of 3.2% continuously compounded, what is the present value of these cash flows, to the nearest $0.01?
I am using PV of perpetuity formula with a compounded interest and getting 280488.96
The correct answer should be 275529.43
What am I doing wrong?