The Present Value of $300 Received 5 Years in the Future

question 55

Multiple Choice

The present value of $300 received 5 years in the future would be calculated as which of the following when the interest rate is 5%?

• A)300/(1.5)⁵
• B)300/(1.05)⁵
• C)300 × 1.5 × 5
• D)5.05/300

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Definitions:

Variables

Elements, features, or factors that can be changed and measured in an experiment to determine their effects.

Main Effect

In analysis of variance, when a factor or an independent variable has a significant effect upon the outcome variable.

ANOVA

Short for Analysis of Variance, a set of statistical techniques used to compare the means of three or more samples.

Factor

An element that contributes to a particular result or situation, often used as a variable in experiments and statistical analysis.