For $10,000 You Can Purchase a 5-Year Annuity That Will

question 11

Multiple Choice

For $10,000 you can purchase a 5-year annuity that will pay $2358.65 per year for five years. The payments are made at the beginning of each year. Calculate the effective annual interest rate implied by this arrangement: (approximately)

• A) 8%
• B) 9%
• C) 10%
• D) none of the above

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Definitions:

Incidence

The occurrence, rate, or frequency of a disease, crime, or something else undesirable.

Dental Disease

A range of conditions that affect the health of the teeth and gums, including cavities, gum disease, and oral cancer.

Correlation Coefficient

A measure of correlation that ranges in value from –1.00 to +1.00.

Meta-Analysis

A set of techniques for combining data from a number of related studies to determine the explanatory strength of a particular independent variable.