If the Annual Interest Rate Is 1% (0

question 11

Multiple Choice

If the annual interest rate is 1% (0.01) ,what is the present value of the future sum of $100 expected three years from today?

• A) $93.
• B) $94.
• C) $96.
• D) $98.
• E) $97.

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Definitions:

Test Statistic

A statistic (a quantity derived from the sample) used in statistical testing to decide whether to reject the null hypothesis.

Type I Error

Occurs when a true null hypothesis is incorrectly rejected, often referred to as a "false positive."

Level of Significance

A statistical measure that indicates how likely it is that the results observed in your data occurred by chance.

Null Hypothesis

The null hypothesis is a default hypothesis that there is no significant difference or relationship between specified populations, any observed difference being due to sampling or experimental error.