What Is the Present Value of $10,000 Per Year in Perpetuity

question 24

Multiple Choice

What is the present value of $10,000 per year in perpetuity at an annual interest rate of 10 percent? Assume the perpetuity starts in one year.

• A)$10,000
• B)$100,000
• C)$200,000
• D)$1,000

---

Definitions:

Risk Assessment

The identification, evaluation, and prioritization of risks followed by coordinated efforts to minimize or control their impact.

Indemnity

A contractual obligation of one party to compensate the loss incurred by another party due to the acts of the indemnitor or another party.

Insurance Claims

Requests made by policyholders to an insurance company for compensation or coverage for a covered loss or policy event.

Profiting

The act of earning a financial gain or benefit, often from business operations or investments.