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So I understand how to calculate A and B But my question is, as for...

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Accounting

image So I understand how to calculate A and B But my question is, as for the calculation of B, why is it 100 + 100/0.04? 1) Why is there an additional 100? 2) What if the payment was made after 2 years? will it be 100 + 100 + 100/0.04?

The British government has a consol bond outstanding paying 100 per year forever. Assume the current interest rate is 4% per year. a. What is the value of the bond immediately after a payment is made? b. What is the value of the bond immediately before a payment is made

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