--%>

Calculating Present Value by Interest Rate

When all bonds are perpetuities which annually pay $1000 (the sum of one thousand and 00/100 dollars) per annum, at an interest rate of 10 percent, the price of these bonds is: (1) $4000. (2) $5000. (3) $6250. (4) $8000. (5) $10,000.

Can anybody suggest me the proper explanation for given problem regarding Economics generally?

   Related Questions in Microeconomics

  • Q : Rule of thumb for office rent Is there

    Is there any rule of thumb for office rent or on lease per gross income? If yes, then explain?

  • Q : Institutes a legal price floor in

    Assume that recent advances within agricultural technology resulted into the U.S. wheat market being at a first equilibrium upon S0D0. Farmers complain which gluts within the wheat market have depressed their incomes, endangering the family farm.

  • Q : Oligopolistic nature of industries The

    The oligopolistic nature of several industries is probably to be attributable to: (1) overly expansionary macroeconomic policies. (2) corporate instability. (3) economies of scale. (4) cooperative gaming. (5) unstable Nash equilibrium.

    Q : Entry and exit of purely competitive

    Pure competition is described by freedom of entry and exit by firms which are: (i) price discriminators and quality adjusters. (ii) price takers and quantity adjusters. (iii) owned and operated by entrepreneurs. (iv) arbitrators and p

  • Q : Effect of prices declining in

    Can someone please help me in finding out the precise answer from the following question. Americans would start cultivating bigger, greener lawns when the: (i) Prices of the fertilizer and water declined. (ii) Government imposed stricter safety standards for the lawn

  • Q : Greatest percentage rate of return The

    The greatest percentage rate of return would be generated through a financial investment which yielded: (w) annual income = $1,000; current price = $10,000. (x) monthly income = $100; current price = $24,000. (y) annual income = $1,200; current price = $10,800. (z) an

  • Q : Illustration of Conglomerates I have a

    I have a problem in economics on Illustration of Conglomerates. Please help me in the following question. Prudential Insurance owns big farms in addition to its insurance operations, and is an illustration of: (1) Conglomerate. (2) Insurance fraud. (3) Monopoly. (4) H

  • Q : Price elasticity of demand as the

    The price elasticity of demand is approximately measured as the absolute value of as: (1) (% change in Q) / (% change in Y). (2) ratio of the slopes of demand relative to supply. (3) (% change in Q) / (% change in P). (4) constant slo

  • Q : Practicing predatory pricing by a

    This is difficult to convict a company for practicing predatory pricing since: (w) the degree of economic analysis needed is beyond the understanding of most lawyers. (x) this is not illegal to practice predatory pricing. (y) this is frequently hard t

  • Q : Problem on Marginal resource costs Can

    Can someone help me in finding out the right answer from the given options. The synonymous words marginal factor costs or the marginal resource costs signify to the: (i) Cost incurred in generating an additional unit of capital. (ii) Cost to the resource owner of secu