Tony Loaned $1,000 to Dave for One Year, with the Understanding

question 51

Multiple Choice

Tony loaned $1,000 to Dave for one year, with the understanding that Dave would repay $1,070 to Tony.If the actual inflation rate was 7 percent, what was the real rate of interest Tony received?  

• A) 14 percent 
• B) 7 percent 
• C) 4 percent 
• D) 0 percent

---

Definitions:

F Distribution

A continuous probability distribution that arises in the testing of whether two population variances are equal and in the analysis of variance (ANOVA).

Degrees of Freedom

The number of independent values or quantities that can vary in an analysis without violating any constraints, influencing the flexibility of statistical calculations.

F Statistic

A statistical measure used to analyze the variance among group means in a sample, often used in the context of ANOVA.

ANOVA Table

A tabular representation used in analysis of variance to summarize the sources of variation between groups and within groups.