An Investment Offers to Pay $100 a Year Forever Starting

question 80

Multiple Choice

An investment offers to pay $100 a year forever starting at the end of year 6.If the interest rate is 8%,what is the investment's value today?

• A) $787.71
• B) $850.73
• C) $1,250
• D) $1,586.87

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Definitions:

Borrowing

The act of adopting ideas, practices, or elements from one discipline or methodology into another.

Theory

A system of ideas intended to explain something, especially one based on general principles independent of the thing to be explained.

Post-modernism

An intellectual stance or mode of discourse defined by skepticism toward narratives of historical progress and grand theories.

Empathic

The ability to understand and share the feelings of another person, often leading to compassion and support.