If the Single Amount of $5,000 Is to Be Received

question 85

Multiple Choice

If the single amount of $5,000 is to be received in 3 years and discounted at 6%, its present value is

• A) $4,198.10.
• B) $4,717.30.
• C) $4,450.00.
• D) $4,395.45.

---

Definitions:

Expected Value

The weighted average of all possible values of a random variable, representing its mean or center.

Variance

A statistical measurement that describes the spread of numbers in a data set, calculated as the average of squared deviations from the mean.

Probability

A numerical range from 0 to 1 signifying the chances that an event will happen.

Psychiatrist's Theory

A hypothesis or set of hypotheses proposed by a psychiatrist that attempts to explain behavioral, psychological, or mental disorders.