If the Interest Rate Is 15% and Will Remain 15

question 8

Multiple Choice

If the interest rate is 15% and will remain 15% forever, how much would a rational investor be willing to pay for an asset that will pay him 3,450 dollars 1 year from now, 1,322 dollars 2 years from now, and nothing at any other time?

• A)4,000 dollars
• B)26,666.67 dollars
• C)64,000 dollars
• D)3,000 dollars
• E)5,000 dollars

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