How Much Money Would You Have to Deposit Today to Create

question 63

Multiple Choice

How much money would you have to deposit today to create an income stream that pays $10,000 one year from today and continues to make annual payments forever,with payments after the first $10,000 growing at 4% per year? Assume money that you invest today to fund this income stream earns a 7% rate of return.

• A)$142,857
• B)$250,000
• C)$1,250,000
• D)$333,333

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