If You Must Calculate the Present Value of an Amount

question 66

Multiple Choice

If you must calculate the present value of an amount at 12% compounded quarterly for two years,then the interest factor used in the calculation is

• A)3% for eight periods.
• B)12% for eight periods.
• C)the interest factor for 12% for two periods divided by 4.
• D)None of these are correct

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Definitions:

Standard Deviation

A method for assessing the level of spread or diversity among a set of data figures.

Speed

The rate at which an object covers distance, usually defined as distance traveled per time unit.

Interstate Highway

A system of express highways that span across states, facilitating high-speed, long-distance travel.

Geometric Mean

The nth root of the product of n numbers, used to calculate average rates of return or growth over time by mitigating the effect of large outliers.