Solve the Problem A) 9064
B) 8

question 54

Multiple Choice

Solve the problem.
-A survey of the interest rates earned by Certificates of Deposit (CDs) showed the following percents for the length of time (in years) for holding the CD. Let length of time represent the independent variable and interest
Rate represent the dependent variable. Use a graphing utility to draw a scatter diagram and to find the line of
Best fit. What is the estimate of the interest rate for a CD held for 30 years (to the nearest thousandth) ? $$\begin{array} { l | l } \text { CD Maturity (yrs) } & \text { Interest rate (\%) } \\\hline 5 & 8.458 \\10 & 8.470 \\15 & 8.496 \\20 & 8.580 \\25 & 8.625\end{array}$$

• A) 9.064
• B) 8.874
• C) 8.669
• D) 8.675

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Definitions:

Accounting Rate of Return

This is a financial ratio used to estimate the profitability of an investment, calculated by dividing the average annual accounting profit by the initial investment cost.