A Recent Advertisement in the Financial Section of a Magazine

question 79

Multiple Choice

A recent advertisement in the financial section of a magazine carried the following claim: "Invest your money with us at 14 percent,compounded annually,and we guarantee to double your money sooner than you imagine." Ignoring taxes,how long would it take to double your money at a nominal rate of 14 percent,compounded annually?

• A) 3.66 years
• B) 5.29 years
• C) 7.00 years
• D) 10.24 years
• E) 14.00 years

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Definitions:

F-ratio

A statistical test ratio used in the analysis of variance (ANOVA) to determine if the variances between means are significant, typically comparing the variance between groups to the variance within groups.

R

A programming language and free software environment used for statistical computing and graphics.

Significance

The likelihood that an observed effect or relationship in data is not due to chance, typically assessed through statistical tests.

Regression Equation

A mathematical formula that describes the relationship between two or more variables, typically identifying how one dependent variable changes as an independent variable(s) changes.