What Is the Present Value of a $1,100 Payment Made

question 55

Multiple Choice

What is the present value of a $1,100 payment made every year forever when interest rates are 4.5 percent?

• A) $11,100
• B) $21,089.37
• C) $22,963.14
• D) $24,444.44

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Definitions:

Error of Estimation

The discrepancy between a population parameter and its estimate, indicating the uncertainty associated with the estimation process.

Statistic

A single measure, calculated from sample data, used to summarize a characteristic of the sample.

Parameter

A characteristic or measure that can define or summarize a particular aspect of a statistical population or model.

Estimation

The process of finding an approximate value of some parameter—such as a mean or proportion—of a population, based on random sample data.