How Much More Is a Perpetuity of $1,000 Worth Than

question 48

Multiple Choice

How much more is a perpetuity of $1,000 worth than an annuity of the same amount for 20 years? Assume an interest rate of 10% and cash flows at the end of each period.

• A) $297.29
• B) $1,486.44
• C) $1,635.08
• D) $2,000.00

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Definitions:

Anorexia Nervosa

An eating disorder characterized by an extremely low body weight, distorted body image, and an obsessive fear of gaining weight.

Rigidity, Perfectionism

A psychological trait characterized by inflexibility and an overemphasis on flawlessness and order.

Anorexia Nervosa

An eating disorder characterized by an obsessive fear of gaining weight and a refusal to maintain a healthy body weight.

Bulimia Nervosa

An eating disorder characterized by binge eating followed by purging behaviors, such as vomiting or excessive exercise, to prevent weight gain.