If a Person Is Going to Pay $500 Per Month

question 60

Multiple Choice

If a person is going to pay $500 per month every month for 5 years, what do you know about their car loan (if the interest rate is positive) ?

• A)Nothing.
• B)The loan amount was more than $30,000.
• C)The loan amount was exactly $30,000.
• D)The loan amount was less than $30,000.

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Definitions:

Arithmetic Average Return

The sum of returns in each period divided by the number of periods, often used to calculate the average return of an investment.

Multi-year Period

An extended timeframe that spans over multiple years, often used in the context of financial planning or contracts.

Variance

A numerical indicator representing the variance within a dataset, highlighting the extent to which the values deviate from the mean.

Squared Deviation

The squared difference between a specific value and a comparison value, commonly used in statistics to measure variability.