What Payment 5 Months from Now Would Be Equivalent in Value

question 255

Multiple Choice

What payment 5 months from now would be equivalent in value to a $4,000 payment due today and a $3,000 payment due 7 months from now? Money can earn 6.5%.

• A) $7,455.01
• B) $6,923.82
• C) $7,189.58
• D) $7,076.18
• E) $6,544.98

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Definitions:

College Students

Individuals enrolled in institutions of higher education to pursue degree programs.

Sampling Distribution

Statistical probability distribution resulting from a random sampling.

Sample Proportions

A statistic that describes the fraction of items in a sample that meet a certain criteria, often used to estimate the proportion in the total population.

Population Proportions

A rephrased definition: The fraction of individuals in various categories relative to the total population under study.