How much must you deposit today in order to withdraw $1,500 in 1 year, $400 in 2 years and $1,500 in 4 years, assuming your money earns 6% per year, compounded annually?
Answer(s): C
Solve this question by working 3 compound interest problems. On the BAII Plus, press 1 N, 6 I/Y, 0 PMT, 1500 FV, CPT PV, which yields $1,415.09. Then press STO 1. Then press 2 N, 400 FV, CPT PV, which yields $356.00. Then press + RCL 1 = STO 1. Then press 4 N, 1500 FV, CPT PV, which yields $1,188.14. Then press + RCL 1 = to see the answer. On the HP12C, press 1 n, 6 i, 0 PMT, 1500 FV, PV. Then press STO 1. Then press 2 N, 400 FV, PV. Then press RCL 1 + STO 1. Then press 4 n, 1500 FV, PV. Then press RCL 1 + to see the answer. Note that the answer will be displayed as a negative number. Make sure the BAII Plus has the P/Y value set to 1.
A normally distributed variable has a mean of 45. If 95% of the observations on the variable fall between 30 and 60, the standard deviation of the variable is approximately ________.
Answer(s): A
95% of the observations on a normally distributed variable lie within about two standard deviations of the mean.The standard deviation is then (45-30)/2 = 7.5.
Given the following distribution regarding the cost of textbooks:Cost of Textbooks Number$25 - $342$35 - $445$45 - $547$55 - $6420$65 - $7416What is the relative class frequency for the $25 - $34 class?
Answer(s): E
The relative frequency is given by 2/50 = 0.04 = 4%
If the underlying theory suggests that the value of an estimated variable is greater than a particular number, it is appropriate to use:
Answer(s): D
When an observation is made and we see a value greater than the threshold suggested by the theory, we would like to known the probability of getting the larger value due simply to chance rather than to the event being driven by the theory. For this, we need to known the right-tail probabilities under the null hypothesis.
What monthly payment, beginning next month, is required over the next 48 months to pay off a $10,000 debt today, if interest is charged at 10% per year, compounded monthly?
On the BAII Plus, press 48 N, 10 divide 12 = I/Y, 10000 PV, 0 FV, CPT PMT. On the HP12C, press 48 n, 10 ENTER 12 divide i, 10000 PV, 0 FV, PMT. Make sure the BAII Plus has the P/Y value set to 1.
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