What Is the Present Value of $100 Paid in 10

question 22

Multiple Choice

What is the present value of $100 paid in 10 years if the interest rate is 2% per year?

• A)$82.03
• B)$98.04
• C)$102.00
• D)$121.90

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Definitions:

Student T Distribution

Student's t-distribution is a probability distribution used in statistics, especially for small sample sizes or unknown population variances, providing a basis for the estimation of population parameters.

Degrees of Freedom

The number of independent pieces of information that go into the estimation of a parameter or calculation of a statistic.

Normal Distribution

The probability distribution is evenly spread around the mean, signifying more frequent occurrences of data points near the mean than those that are more distant.

Exponential Distribution

The exponential distribution is a continuous probability distribution that is often used to model the time between events in a process that occur continuously and independently at a constant average rate.