A Debt of $7000 Is Due with Interest at J₂

question 56

Multiple Choice

A debt of $7000 is due with interest at j₂ = 8% at the end of 3 years.To repay this debt,a payment of $1500 is made at the end of 1 year,followed by a payment of $X at the end of 2 years.If money is worth j₄ = 10%,what is the value of X so that the loan is fully paid off?

• A)$4685.94
• B)$4713.64
• C)$5172.40
• D)$6873.10

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Definitions:

Population Mean

The average of all the values in a population, serving as a measure of central tendency.

Sample Mean

The average value calculated from a sample of data points, used as an estimate of the population mean.

Sample Median

The middle value of a sample data set arranged in ascending or descending order, used as a measure of central tendency.

Bootstrapping

A statistical method that resamples a single dataset to create many simulated samples, used in assessing the precision of sample estimates.