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You are considering buying a perpetuity contract from your insurance company that will pay you $500 annually where the payment will grow by 3% each
You are considering buying a perpetuity contract from your insurance company that will pay you $500 annually where the payment will grow by 3% each year. Using a discount rate of 9%, the most you should be willing to pay for this contract is closest to:
A) $5,556
B) $8,333
C) $12,367
D) $16,667
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