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Today, the maximum amount of money that Ramesh is willing to pay for a certain perpetuity is $2,000. Assuming the interest rate and the annual
Today, the maximum amount of money that Ramesh is willing to pay for a certain perpetuity is $2,000. Assuming the interest rate and the annual payments remain the same, what is the maximum amount of money that Ramesh should be willing to pay for the same perpetuity exactly two years from today? a. Any amount greater than $2000.00 but less than $2332.80, if the discount rate is more than 8% p.a. b. Any amount greater than $1714.68 but less than $2000.00 if the discount rate is less than 8% p.a. c. Any amount less than $1714.68 if the discount rate is less than 8%p.a. d. Any amount greater than $2332.80 if the interest rate is more than 8% p.a. e. None of the answers listed above is correct
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