You Agree to Lend a Friend $20,000 for a Year

question 148

Multiple Choice

You agree to lend a friend $20,000 for a year at an annual interest rate of 45%. At the end of the year your friend must pay you ________ in interest.

• A) $133
• B) $750
• C) $1,900
• D) $9,000

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Definitions:

Exponential Distributions

A type of continuous probability distribution that is often used to model the time between independent events that happen at a constant average rate.

Uniform Probability Distribution

A continuous probability distribution for which the probability that the random variable will assume a value in any interval is the same for each interval of equal length.

Continuous Random Variable

A Continuous Random Variable is a variable that can take an infinite number of values within a given range.

Probability Density Function

A function that describes the relative likelihood for a continuous random variable to occur at a point in the observation space.