If the Future Value of an Ordinary, 7-Year Annuity Is

question 1

Multiple Choice

If the future value of an ordinary, 7-year annuity is $10,000 and interest rates are 4 percent, what is the future value of the same annuity due?

• A) $9,615.38
• B) $10,000.00
• C) $10,400.00
• D) $10,700.00

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Definitions:

Population Average

The mean of all observations or values in a population.

Standard Error

A statistical measure that describes the accuracy with which a sample represents a population, specifically the variability of the sampling distribution.

Sample Mean

The average of a set of numerical values taken from a subset (sample) of a larger population.

Probability

A measure of the likelihood of a particular event's occurrence, ranging from 0 (impossible) to 1 (certain).