Assume That $100 Is Deposited at the End of Each

question 77

Multiple Choice

Assume that $100 is deposited at the end of each year for five years at 10% compound interest and that no withdrawals are made over the five-year period. Based on this data, which one of the following statements is correct?

• A) The future value will be $550.
• B) The present value can be determined by computing the present value of $500 in five years at 10%.
• C) The present value can be determined by computing the present value of a $100 ordinary annuity for five years at 10%.
• D) The present value will be $500.

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Definitions:

Null Hypothesis

A statement made for statistical testing that assumes no effect or no difference between groups or variables being studied.

Statistical Power

The probability that a test will correctly reject a false null hypothesis; a measure of a test's ability to detect an effect, if there is one.

Type II Error

The statistical mistake of failing to reject a false null hypothesis, also known as a false negative.

Sample Size

The number of observations or items selected from a larger population for the purpose of statistical analysis.