Answer
$ \$ 72.67$
Work Step by Step
Since, the given model is an infinite geometric series with common ratio $r_0=\dfrac{1+i}{1+r}$
We have: $\ Price =\lim\limits_{n \to \infty} P[\dfrac{1(1-(\dfrac{1+i}{1+r})^n)}{1-(\dfrac{1+i}{1+r})}]$
Now, $r_0=\dfrac{1+ 0.03}{1+0.09}=\dfrac{1.03}{1.09}$
Substitute the given data in the above equation to obtain:
$\ Price =\lim\limits_{n \to \infty} P[\dfrac{1(1-(\dfrac{1.03}{1.09})^n)}{1-(\dfrac{1.03}{1.09})}] \\=(4) \times \dfrac{1.09}{0.06}$
Therefore, the price is $ \$ 72.67$
