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:

Outlay

The amount of money spent on a particular item or service, serving as expenses in financial transactions or projects.

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing between options.

Capital

Economic resources that are used to create goods and services, such as buildings, machinery, and equipment.

Accounting Profit

Total revenue minus total explicit cost