If You Own a Perpetuity of $100 and If the Discount

question 178

Multiple Choice

If you own a perpetuity of $100 and if the discount rate is 5 percent, then its present value

• A)cannot be determined unless we know the number of years
• B)is $95.21
• C)is $105
• D)is $2, 000
• E)is infinite

---

Definitions:

Angela's Meat & Poultry

A hypothetical or specific business name, possibly referring to a retailer, wholesaler, or producer of meat and poultry products.

Telemarketers

Individuals or companies that market goods or services over the telephone.

Introductory Subscription

An introductory subscription offers new subscribers access to a service at a reduced rate, encouraging them to try out the service before committing to standard pricing.

Median

An average of a group of values, computed by arranging the numbers in numerical order and finding the middle number.