A perpetuity pays $250 per year and interest rates are 8.5 percent. How much would its value change if interest decreased to 5.5 percent? Did the value increase or decrease?
A) $1,604.27; increase
B) $1,604.27; decrease
C) $1,714.20; increase
D) $1,714.20; decrease
Correct Answer:
Verified
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