What's the Present Value of a Perpetuity That Pays $250

question 156

Multiple Choice

What's the present value of a perpetuity that pays $250 per year if the appropriate interest rate is 5%?

• A) $4,750
• B) $5,000
• C) $5,250
• D) $5,513
• E) $5,788

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Definitions:

Truth in Lending Act

A federal law designed to promote informed use of consumer credit by requiring disclosures about its terms and cost.

Credit Terms

Conditions under which credit is extended by a lender to a borrower, including interest rates, repayment schedule, and other critical terms of the credit agreement.

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FTC

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