How much will the dollar value of the consol change

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Problem 1: A British Consol will pay $50 each year indefinitely. The current market interest rate (and the appropriate discount rate) for equally risky investments is 4 percent. If the market interest rate rises to 6 percent, by about how much will the dollar value of the consol change?

Group of answer choices

Option 1: $1,200

Option 2: $163

Option 3: $250

Option 4: $417

Reference no: EM133007276

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