If the Annual Interest Rate Remains Unchanged Over the Next

question 170

Multiple Choice

If the annual interest rate remains unchanged over the next two years, and the present value of $120 to be received one year from now is $100, what will $100 be worth two years from now?

• A) $120
• B) $140
• C) $144
• D) Uncertain. We need to know the interest rate.

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Definitions:

Simple Linear Regression

Regression analysis involving one independent variable and one dependent variable in which the relationship between the variables is approximated by a straight line.

Coefficient Of Determination

A measure, usually represented as R^2, that shows the proportion of the variance in the dependent variable that is predictable from the independent variable(s).

Variance

A measurement of the spread between numbers in a data set, signaling how far each number in the set is from the mean.

MSE

Mean Squared Error, a measure of the average squared differences between the estimated values and the actual value, indicating the quality of an estimator.