If the Interest Rate Is 19% and Will Remain 19

question 15

Multiple Choice

If the interest rate is 19% and will remain 19% forever, how much would a rational investor be willing to pay for an asset that will pay him 2,380 dollars 1 year from now, 1,416 dollars 2 years from now, and nothing at any other time?

• A)2,000 dollars
• B)3,000 dollars
• C)15,789.47 dollars
• D)60,000 dollars
• E)4,000 dollars