You Are Going to Pay $800 into an Account at the Beginning

question 110

Multiple Choice

You are going to pay $800 into an account at the beginning of each of 20 years.The account will then be left to compound for an additional 20 years until the end of year 40,when it will turn into a perpetuity.You will receive the first payment from the perpetuity at the end of the 41st year.If the account pays 14%,how much will you receive from the perpetuity each year (round to nearest $1,000) ?

• A)$140,000
• B)$150,000
• C)$160,000
• D)$170,000

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Definitions:

Persuade

The act of convincing someone to do or believe something through reasoning or argument.

Request

The act of politely or formally asking for something.

Inspirational Appeal

An influence tactic that seeks to motivate and engage others by appealing to their emotions or ideals.

Enthusiasm

A strong excitement or eagerness about doing something or about something that interests one.