If the interest rate is 15% and will remain 15% forever, how much would a rational investor be willing to pay for an asset that will pay him 3,450 dollars 1 year from now, 1,322 dollars 2 years from now, and nothing at any other time?

A) 4,000 dollars
B) 26,666.67 dollars
C) 64,000 dollars
D) 3,000 dollars
E) 5,000 dollars

Rational Investor

An investor who makes decisions based on the expected outcomes, utilizing all available information to maximize the utility of wealth.

Interest Rate

The proportion of a total amount of money that is charged for borrowing it, usually represented as a yearly percentage rate.

Asset

A resource with economic value that an individual, corporation, or country owns or controls with the expectation that it will provide future benefit.