Present Value of an Annuity What Is the Present Value

question 40

Multiple Choice

Present Value of an Annuity What is the present value of a $300 annuity payment over 5 years if interest rates are 8 percent?

• A)$204.17
• B)$440.80
• C)$1,197.81
• D)$1,938.96

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Definitions:

Correlation Model

A statistical model that describes the relationship or association between two or more variables using a correlation coefficient.

Error Term

A variable in statistical models that represents the difference between the observed and predicted values, accounting for randomness or unexplained variation.

Independent

Describes variables in an experiment or study that are manipulated or categorized separately from any other variables.

Normally Distributed

Describes a statistical distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean.