The Earning of Interest on Interest Is

question 20

Multiple Choice

The earning of interest on interest is

• A) present value.
• B) future value.
• C) discount rate.
• D) compounding of interest.
• E) interest earned.

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Definitions:

Probability Mass Function

An operation that calculates the chance that a given discrete random variable precisely equals a certain value.

Probability Density Function

A mathematical function that describes the likelihood of a continuous random variable taking on a specific value.

Normal Distribution

A bell-shaped frequency distribution that is symmetrical about the mean, describing how many data points, given continuous variables, distribute in nature.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values in a data set deviate from the mean.