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Your friend promises you a perpetuity of $1 every year. If the first payment occurs in year 1 and the present value of the promise

Your friend promises you a perpetuity of $1 every year. If the first payment occurs in year 1 and the present value of the promise is $20, which of the following is right about the interest rate?

a.12.50%

b.10.00%

c.8.33%

d.6.67%

e.None of the above

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