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You are considering purchasing a perpetuity investment that will entitle you to receive $10 every month forever. The first perpetuity payment starts one month after
You are considering purchasing a perpetuity investment that will entitle you to receive $10 every month forever. The first perpetuity payment starts one month after the investment is purchased. If the relevant nominal annual discount rate is 12%, with monthly compounding, what is the maximum amount you should be willing to pay for this investment? (rounded to the nearest $) X A: $2020 X B: $2000 X C: $1000 X D: $1010 X E: $990
Please show the correct option with proper step-by-step working and explanation.
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