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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

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. $1,714.20; decrease

c. $1,714.20; increased

d. $1,604.27; decrease

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