Sally Wishes to Invest $4500 in a 2-Year CD with an Interest

question 85

Multiple Choice

Sally wishes to invest $4500 in a 2-year CD with an interest rate of 5.3% each year and compounded monthly. What is the annual percentage yield for Sally's CD (rounded to the nearest hundredth) ?

• A) 5.43%
• B) 1.05%
• C) 5.3%
• D) 11.16%
• E) 0.44%

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Definitions:

Observational

Relating to the collection of data by observing and measuring phenomena as they occur naturally, without manipulation or intervention.

Categorical Variable

A variable that can take on one of a limited, and usually fixed, number of possible values, assigning each individual to a particular group or category.

Quantitative Variable

A type of variable that can be measured and expressed numerically, allowing for mathematical operations and statistical analysis.

Statistical Inference

The method of applying data analysis techniques to infer characteristics of a fundamental probability distribution.