Calculate the Present Value of a Perpetuity That Will Pay

question 124

Multiple Choice

Calculate the present value of a perpetuity that will pay out $7,500 every six months and the first payment is to be made four years from now. The interest rate earned is 8.6% compounded semi-annually.

• A) $174,419
• B) $129,898
• C) $124,543
• D) $119,563
• E) $104,826

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Definitions:

Just Deserts

A concept in justice and ethics where individuals are believed to deserve punishment or reward commensurate with their actions.

Marxist Approach

A method of socioeconomic analysis that examines class relations and societal conflict using a materialist interpretation of historical development, based on the ideas of Karl Marx.

Rusche and Kircheimer

Theorists known for their work on the social theory related to punishment, proposing that forms of punishment change with social structures.

Severity of Punishment

The degree of harshness or intensity of a penalty imposed for wrongdoing.