A Perpetuity of $5,000 Per Year Beginning Today Is Said

question 2

Multiple Choice

A perpetuity of $5,000 per year beginning today is said to offer a 15 percent interest rate.What is its present value?

• A)$33,333.33
• B)$37,681.16
• C)$38,333.33
• D)$65,217.39 PV = $5,000 +

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Definitions:

Closing Costs

Costs that are paid at closing that include origination fees, attorney fees, points, prepaid interest, transfer tax, and title insurance.

Exponential Regression

A statistical method used for modeling the relationship between a dependent variable and an exponential function of an independent variable.

Rent Increases

The upward adjustment in rental charges, typically on an annual basis or at the renewal of a lease agreement.

Slope

The slope of a line is the numerical value for the inclination or declination of that line and is expressed as a ratio of the change in the vertical variable over the change in the horizontal variable from one point on the line to the next.