A consol is a bond that pays a fixed nominal payment each year forever. Let's assume that payments start this year. What would be the current price of the consol when the nominal interest rate is constant at 5% and the annual payment is $1,000? OA. O A. $20,000 $1,050 OB. Ос. 51,000 OD. O D. $21,050 OE. $21,000
A consol is a bond that pays a fixed nominal payment each year forever. Let's assume that payments start this year. What would be the current price of the consol when the nominal interest rate is constant at 5% and the annual payment is $1,000? OA. O A. $20,000 $1,050 OB. Ос. 51,000 OD. O D. $21,050 OE. $21,000
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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![A consol is a bond that pays a fixed nominal payment each year forever. Let's assume that payments start this year.
What would be the current price of the consol when the nominal interest rate is constant at 5% and the annual
payment is $1,000?
$20,000
А.
В. S1,050
Ос. 51,000
$21,050
OD.
$21,000
O E.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F475639b2-474b-40a8-9f9b-40a10cc32c20%2F9387e49e-6c02-477a-b3be-5a3dc9e82211%2Fmipcbg_processed.png&w=3840&q=75)
Transcribed Image Text:A consol is a bond that pays a fixed nominal payment each year forever. Let's assume that payments start this year.
What would be the current price of the consol when the nominal interest rate is constant at 5% and the annual
payment is $1,000?
$20,000
А.
В. S1,050
Ос. 51,000
$21,050
OD.
$21,000
O E.
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