If the Present Value of a Perpetuity Is $6,000 and the Discount

question 107

Multiple Choice

If the present value of a perpetuity is $6,000 and the discount rate is 8%, how large are the payments?

• A)$60,000
• B)$750
• C)$480
• D)$1,000
• E)$75,000

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Definitions:

Equilibrium Price

The market price at which the quantity of goods supplied equals the quantity demanded, leading to market stability.

Quantity Supplied

The supply of goods or services that vendors are prepared and capable of offering at an established price over a specified duration.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price in a specific time period.

Clear The Market

This is a term used in economics to describe a scenario where the quantity supplied matches the quantity demanded, meaning the market is in equilibrium and there are no surplus or shortage.