The Present Value of $1,500 Received 8 Years in the Future

question 272

Multiple Choice

The present value of $1,500 received 8 years in the future would be calculated as which of the following when the interest rate is 3%?

• A)1,500/(1.3)⁸
• B)1,500/(1.03)⁸
• C)1,500 × 1.3 × 8
• D)8.03/1,500

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Definitions:

Illusory Correlation

The perception of a relationship between two variables when no such relationship exists.

Psychological Variable

An element, feature, or factor that can be changed and can affect the outcome of psychological research or behavior.

Correlation Coefficients

Statistical measures that determine the degree to which two variables vary together or the strength of their relationship.

Predictions

Statements or claims made about future events, often based on patterns observed in past data or understanding of processes.