Answered: the interest rate is 10 percent, the…

the interest rate is 10 percent, the present value of an annual payment of $100,000 to be received indefinitely is: a. $976,463. b.

Essentials of Economics (MindTap Course List)

8th Edition

ISBN:9781337091992

Author:N. Gregory Mankiw

Publisher:N. Gregory Mankiw

Chapter19: The Basic Tools Of Finance

Section: Chapter Questions

Problem 1QR

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Question

If the interest rate is 10 percent, the present value of an annual payment of $100,000 to be received indefinitely is:

$976,463.

infinite.

$1,000,000.

$2,000,000.

$1,246,296.

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