You Have $100 to Deposit

question 1

Multiple Choice

You have $100 to deposit. Bank A offers 20% simple interest, Bank B offers 15% interest compounded annually. How many years would you have to keep your money in the bank for Bank B to be a better choice than Bank A?

• A)Bank B is always better.
• B)4 years
• C)5 years
• D)6 years
• E)Bank B will never be better.

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Definitions:

Denominator

The bottom number in a fraction that shows how many equal parts the item or group is divided into.

Categorical Variable

A variable with categorical data.

Dummy Variables

Variables used in regression analysis to represent categorical data by converting it into a series of binary values.

Levels

The different values or categories that a factor can have in an experiment or statistical model.