# Normal Distribution, Time Value of Money

1.Consider the normal distributions drawn below (with different scales)

They both have m = 20 and the area of the shaded region of each is 0.90. Which of the following holds?

a. x1 < x2

b. x1 > x2

c. x1 = x2

d. There is not enough information

e. x1 >= x2

2.If you deposit $5000 into a fund paying 6% interest compounded quarterly, how much can you withdraw at the end of each quarter for 5 years?

a. $135.92

b. $970.45

c. $291.23

d. $215.17

e. none of the above

Please see the attached file for full problem description.

Â© BrainMass Inc. brainmass.com March 4, 2021, 6:11 pm ad1c9bdddfhttps://brainmass.com/statistics/normal-distribution/normal-distribution-time-value-of-money-33826

#### Solution Preview

1.Consider the normal distributions drawn below (with different scales)

They both have m = 20 and the area of the shaded region of each is 0.90. Which of the following holds?

a. x1 < x2

b. x1 > x2

c. x1 = x2

d. There is not enough information

e. x1 >= x2

Answer: a. x1 < x2

The standard deviation for b) s= 8 is greater than that of a) s= 5.

This means that the spread around the mean is more for b) than for a)

Thus ...

#### Solution Summary

Answers Multiple choice questions on Normal Distribution, Time Value of Money.