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    Constant Risk Rate: Calculating the Present Value

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    Question: Next year you will begin receiving $155 dollars per year in perpetuity from your grandparent's family trust fund (first payment is exactly 1 year from today). You consider these payments essentially risk free and have decided to discount them at a constant risk free rate of 6.5%. What is the present value today of these future cash flows? (Hint: draw a time line to illustrate exactly the cash flows for this problem.)
    a. 1353
    b. 2385
    c. 1270
    d. 146

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