What Annual Payment Must You Receive in Order to Earn

question 130

Multiple Choice

What annual payment must you receive in order to earn a 6.5% rate of return on a perpetuity that has a cost of $1,250?

• A) $77.19
• B) $81.25
• C) $85.31
• D) $89.58
• E) $94.06

---

Definitions:

Condense

In mathematics, to simplify an expression or equation by combining like terms or using algebraic methods to make it more compact.

Solve

To find the value or values of the variables that satisfy an equation, inequality, or a system of equations.

Equation

A mathematical statement that asserts the equality of two expressions, usually denoted by the sign =.

Calculator

An electronic or mechanical device used for performing mathematical calculations.