What is the present value of a perpetuity that pays $$1,000$ at the end of each year if the discount rate is $5\%?$

Question $3$Answer

a$.$

PV$=$$$1,0000\mathrm{.}05=$$$50\mathrm{.}00$

b$.$

PV$=$$$1,0000\mathrm{.}050\mathrm{.}05=$$$1,000$

c$.$

PV$=$$$1,0000\mathrm{.}05=$$$20,000$

d$.$

PV$=$$$1,000(11(1+0\mathrm{.}05)10\mathrm{.}05)=$$$952\mathrm{.}38$