In 10 years you will begin receiving $155 dollars per year

in perpetuity from your grandparent's family trust fund

(first payment is exactly 10 years from today). You

consider these payments essentially risk free and have

decided to discount them at a constant risk free rate of

6.5%. What is the present value today of these future

cash flows? (Hint: draw a time line to illustrate exactly the

cash flows for this problem.)

1353

2385

1270

146

1550