If the Interest Factor Used to Calculate the Future Value

question 20

Multiple Choice

If the interest factor used to calculate the future value of $1 at 6% for 5 periods is 1.338,then the present value of $1 at 6% for 5 periods is

• A)1.338 × 1.338.
• B)1/1.338.
• C)1/(1.338 × 1.338).
• D)0.338.

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Definitions:

Expected Amount

The predicted value or mean of all possible outcomes of a variable, weighted by their probabilities.

Probability Model

A mathematical representation of a random process, describing all possible outcomes and their associated probabilities.

Ace Of Hearts

A playing card in the heart suit, regarded as either the highest or lowest depending on the game.

Comma Splice

A grammatical error involving the incorrect use of a comma to join two independent clauses without a conjunction.