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Computing Present Value for a Perpetuity

When all US Treasury bonds are perpetuities that annually pay the sum of one thousand and 00/100 dollars [$1000] per annum, always, to the holder of this bond starting one year from today, at an interest rate of 4 percent, the price of this bond is: (1) $1400. (2) $4000. (3) $14,000. (4) $25,000. (5) $40,000.

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