In Order to Purchase a Home, a Family Borrows $45,000

question 162

Multiple Choice

In order to purchase a home, a family borrows $45,000 at an annual interest rate of 9%, to be paid back over a 30 year period in equal monthly payments. What is their monthly payment?

• A) $362.08
• B) $11.25
• C) $337.50
• D) $377.64

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Definitions:

Probabilistic Model

A mathematical representation of a random system that is characterized by probabilities and randomness.

Y-Intercept

The point at which a line or curve intersects the y-axis of a coordinate system.

Slope

In the context of linear regression, the magnitude of change in the dependent variable for each unit change in the independent variable.

Residual

The difference between an observed value and the estimated value provided by a model.