Ronald Is Borrowing $20,000 Using the Discount Method

question 71

Multiple Choice

Ronald is borrowing $20,000 using the discount method.His bank is offering him an annual percentage rate of 8.5% and he is taking out the loan for 24 months.How large of a check will Ronald receive from this loan when he leaves the bank? How much will he repay?

• A)$20,000;$23,400
• B)$16,600;$20,000

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Definitions:

Statistically Significant

An observed effect so large that it would rarely occur by chance, indicating that the findings from the data are likely not due to random variation.

ANOVA Null Hypothesis

In Analysis of Variance, the null hypothesis that states there are no mean differences among the groups being compared.

Test Statistic

This is a quantity, derived from sample data, that can be used in statistical hypothesis testing to decide whether to reject the null hypothesis.

Degrees of Freedom

This refers to the number of independent values or quantities that can vary in an analysis without breaking any constraints.