You own a bond issued by the Canadian Pacific railroad that promises to pay the holder $100 annually forever. You plan to sell the bond five years from now. If similar investments yield 8% at that time, how much will the bond be worth?
A) $918.79
B) $1,014.28
C) $1,250.00
D) $1,489.42
E) $1,958.20
Correct Answer:
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