Which of the Following Statements Is True of the Rule

question 2

Multiple Choice

Which of the following statements is true of the rule of 72?

• A) It can be used to determine the amount of time it takes to double an investment.
• B) It is fairly accurate for interest rates between 25 and 50 percent.
• C) It states that the time to double your money (TDM) approximately equals 72/i, where i represents the years it takes to double your investment.
• D) It can be used to estimate approximate compound interest earned for a period of 72 days.

Recognize the subdivisions of owner's equity.

Identify and correct common errors in accounting entries.

Calculate total credits on a trial balance.

Recognize the effects of purchasing supplies on account.

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Definitions:

Positively Skewed

A description of a distribution of data in which the tail on the right side of the histogram is longer than the left side, indicating that most values are clustered on the left.

Sampling Distribution

The probability distribution of a given statistic based on a random sample, used to estimate the population parameter.

Normal Populations

Populations that follow a normal distribution, where the majority of data points are concentrated around the mean value.

Standard Error

A statistical term that measures the accuracy with which a sample distributes around the population mean; it is the standard deviation of the sampling distribution.