Assuming Interest Rates Were 6% Per Annum, What Would Be

question 71

Multiple Choice

Assuming interest rates were 6% per annum, what would be the present value of the $50,000 per year for 30 years payment stream? Use the tables or a financial calculator.

• A) $688,242
• B) $1,500,000
• C) $700,002
• D) $693,974

---

Definitions:

Consistent Estimator

An attribute of an estimator indicating that as the sample size increases, the estimates it produces converge in probability to the parameter being estimated.

Sample Mean

The mean value derived from a dataset sample, utilized to predict the overall population's average.

Sampling Distribution

The probability distribution of a statistic (like a mean) derived from a large number of samples of a population.

Unbiased Estimators

Statistical estimators that are expected to equal the population parameter over many samples.