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Ian Owes $5000 to Shirley, Which Is Payable in Five

question 4

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Ian owes $5000 to Shirley, which is payable in five instalments at an interest. However, after two instalments, Ian offers to pay Shirley the entire debt to avoid paying the interest. Which of the following will take place if Shirley announces that Ian does not have to pay the debt in further instalments?


Definitions:

Least Squares Line

A line of best fit determined by minimizing the sum of squares of the differences between observed values and the values predicted by the line.

Sample Regression Line

A line of best fit through a scatterplot of sample data points in regression analysis, used to estimate the relationship between variables.

Correlation Coefficient

A statistical measure that quantifies the degree to which two variables vary together.

Sample Coefficient

A numerical measure that describes some characteristic or aspect of a sample of data.

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