# Constant Risk Rate: Calculating the Present Value

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

https://brainmass.com/business/capital-budgeting/constant-risk-rate-calculating-the-present-value-240453

$2.19