Consider a Growing Perpetuity That Will Pay $100 in One

question 22

Multiple Choice

Consider a growing perpetuity that will pay $100 in one year.Each year after that,you will receive a payment on the anniversary of the last payment that is 6% larger than the last payment.This pattern of payments will continue forever.If the interest rate is 11%,then the value of this perpetuity is closest to:

• A)$1667.
• B)$588.
• C)$2000.
• D)$909.

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Definitions:

Teamwork

The collaborative effort of a group to achieve a common goal or complete a task in the most effective and efficient way.

Social Loafing

The phenomenon where individuals exert less effort to achieve a goal when they work in a group rather than alone.

Individual Accountability

The obligation of an individual to account for his/her activities, accept responsibility for them, and to disclose the results in a transparent manner.

Groupthink

A psychological phenomenon that occurs within a group of people when the desire for harmony or conformity results in irrational or dysfunctional decision-making outcomes.