One Example of a Difference Between Discrete Random Variables and Continuous

question 109

True/False

One example of a difference between discrete random variables and continuous random variables is that in a discrete distribution P(x > 2) = P(x ≥ 3) while in a continuous distribution P(x > 2) is treated the same as P(x ≥ 2).

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Definitions:

Compound Interest

The addition of interest to the principal sum of a loan or deposit, where the interest that has been added also earns interest.

Equal Payments

A repayment structure where payments are the same amount each period, as seen in some loans and mortgages.

Annuity Due

An annuity whose payments are made at the beginning of each period.

Future Amount

The expected value of an asset or amount of money at a specific date in the future, often factoring in variables like interest rates and compounding periods.