If the Add-On Method Is Used to Calculate a Finance

question 17

Multiple Choice

If the add-on method is used to calculate a finance charge of $150.80 on a $2,200 loan, the amount to be:

• A)repaid is $2,200.
• B)disbursed to the borrower is $2,049.20.
• C)repaid is $2,350.80.
• D)disbursed to the borrower is $2,350.80.
• E)disbursed to the borrower is $150.80.

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Definitions:

Multiple Coefficient

A broader term potentially indicating coefficients in multiple regression that represent the relationship between explanatory variables and the response variable.

Determination

Often associated with the coefficient of determination (R-squared), it measures the proportion of variance in the dependent variable predictable from the independent variable(s).

Degrees of Freedom

The number of independent values or quantities that can vary in an analysis without breaking any constraints.

Critical Value

A value that is compared with the test statistic to determine whether H0 should be rejected.