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. Kiran is thinking about purchasing a birthday gift for his girlfriend. Instead of a handbag or jewellery, he will buy a financial asset for
. Kiran is thinking about purchasing a birthday gift for his girlfriend. Instead of a handbag or jewellery, he will buy a financial asset for her. He thinks this is a wonderful gift because this asset will payout a certain annual cash flow from her 26th birthday until her 35th birthday. The cash flow will be $5,000 on her 26th birthday and this will grow at a rate of 3% each year. How much would Kiran have to pay on his girlfriend's 25th birthday for this asset if he paid the fair value assuming a constant interest rate of 5% p.a. compounding annually? O $40,036.87 $43,737.98 None of the options $42,189.55 $45.570.39
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