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How much will the bond be worth

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You own a bond issued by the Canadian Pacific railroad that promises to pay the holder $100 annually forever. You plan to sell the bond five years from now. If similar investments yield 8% at that time, how much will the bond be worth?

a) $1,250

b) $1,489.42

c) $1,014.28

d) $918.79

e) $1,958.20

How to solve this and is there a way to rephrase this question in a way where I can ignore the fact that it pays out forever? Or is the fact that it will continue to pay out relevant information to this question?

Reference no: EM132538361

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