If You Own a Perpetuity of $100 and If the Interest

question 128

Multiple Choice

If you own a perpetuity of $100 and if the interest rate is 1 percent,then its present value _____

• A)is $100.
• B)is $1000.
• C)is $10,000.
• D)is infinite.
• E)cannot be determined.

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Definitions:

Hypothesis

A statement that attempts to predict or to account for a set of phenomena; scientific hypotheses specify relationships among events or variables and are empirically tested.

Axiom

A statement or proposition that is regarded as being established, accepted, or self-evidently true.

Corollary

A proposition that follows from one already proven, often seen as a natural consequence or result.

Theory

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