You Are to Receive an Annuity of $1,000 Per Year

question 32

Multiple Choice

You are to receive an annuity of $1,000 per year for 10 years.You will receive the first payment two years from today.At a discount rate of 10%,what is the present value of this annuity?

• A) $5,078.15
• B) $5,585.97
• C) $6,144.57
• D) $6,759.03

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Definitions:

Significance Level

The probability threshold below which the null hypothesis is rejected in a statistical test, commonly denoted by alpha (α).

Sample Data

A subset of a population used to estimate or make inferences about the entire population.

Significance Level

The probability of rejecting the null hypothesis in a statistical test when it is actually true, commonly set thresholds include 0.05, 0.01.

Random Sample

A subset of individuals chosen from a larger set, where each individual has an equal chance of being selected.