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 a 10% interest rate and cash flows at end of period.

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

Understand the relationship between a consumer's willingness to pay, market price, and consumer surplus.

Evaluate the impact of market changes on consumer surplus.

Identify the total consumer surplus from graphical data or demand curves.

Determine consumer surplus at different price points for both individual consumers and aggregate markets.