Your friend promises you a perpetuity of $1 every year, which starts in year 1. However, your friend is an absent-minded guy, paying you $2 at year 10 but no payment at year 9. Except for these two years, in other years, the payment is always $1. Which of the following is right about the present value at year zero of your friends all payments if r = 5%?

Select one:

a. $20.03

b. $18.03

c. $21.97

d. $19.97

e. None of the above