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A Certain Investment Promises to Pay You $2,500 Per Year

Question 74

Multiple Choice

A certain investment promises to pay you $2,500 per year forever with the first payment starting next year.If you can earn a 5% return on similar investments,what's the most you would pay for this investment today?


A) $50,000
B) $5,000
C) $41,667
D) $62,500

Correct Answer:

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