Winston Baker Will Invest $25,000 in a Spa That His

question 26

Multiple Choice

Winston Baker will invest $25,000 in a spa that his sister is starting. He will triple his investment in six years. What is the rate of return that Winston is being promised? (Rounded to the nearest percent.)

• A) 18%
• B) 20%
• C) 12%
• D) 25%

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Definitions:

Residual Value

The estimated salvage value of an asset at the end of its useful life.

Observation

An individual data point or measurement recorded during a study or experiment.

Linear Regression

A statistical method for modeling the relationship between a dependent variable and one or more independent variables by fitting a linear equation to the data.

Residuals

The differences between observed values and the expected values predicted by a model.