If the Interest Rate Is 5 Percent,$100 Received at the End

question 66

Multiple Choice

If the interest rate is 5 percent,$100 received at the end of seven years is worth how much today?

• A) 100/(0.05)⁷
• B) 100/(1 + 0.05)⁷
• C) 100/(1 + 5)⁷
• D) 100

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Definitions:

Events

In probability, events are outcomes or occurrences that can be identified in a probabilistic experiment, and to which probabilities can be assigned.

Sample Space

The collection of every potential result that can be derived from conducting a statistical test.

Subset

A set of elements that are all contained within another set, without necessarily including every element of that larger set.

Event

An outcome or occurrence that can be identified or measured, often considered in the context of probability and statistics.