Calculate the Present Value of a Perpetuity That Will Pay

question 145

Multiple Choice

Calculate the present value of a perpetuity that will pay out $1,500 every month and the first payment is to be made 10 years from now. The interest rate earned is 9% compounded annually.

• A) $81,587
• B) $82,199
• C) $92,761
• D) $88,546
• E) $87,913

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Definitions:

Activity Pursuit

The involvement and engagement in tasks or activities that are aimed at achieving specific goals or fulfilling interests.

Intrinsic Motivation

The drive to perform an activity for its inherent satisfaction rather than for some separable consequence.

Intrinsic Motivation

The drive to engage in an activity for its own sake, rather than for an external reward or outcome.

Extrinsic Motivation

Motivation that is driven by external rewards such as money, fame, grades, and praise.