Answer :
According To the Scenario Given,
Sum per year x rate equals the present value of eternity.
Present value of perpetuity = amount per year / rate
- Therefore, in order to pick one choice, its current value must be greater than that of the other option.
Hence,
To select eternity, enter 300000 / rate > 8000000
rate < 300000 / 8000000 \s =>
- Rate < 3.750 %
Therefore, if the rate is below 3.750%, one would prefer 300000 year rather than the 8 million that exist presently.
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