What is the present value of a perpetuity that pays $1,000 per year if the appropriate interest rate is 10%?

Question

asked Sep 8, 2021 149k views

1 Answer

Paul Drummond · Answer 1 · 2021-09-13T21:33:34+0000

Answer:

= $10,000

Step-by-step explanation:

Present Value of a Perpetuity = Annual Payment ÷ Discount Rate

= $1000 / 0.1

Present Value of a Perpetuity

= $10000