Simple Interest
Compound Interest
Mortgages
Stats Terms
Data & Sampling
100
$100
Use I = Prt: P=$1000, r=5%, t=2 years. Find I.
100
$620
A simple-interest loan has P=$500, r=8%, t=3. Find total payoff A.
100
2.5 years
If I=$180, P=$1200, r=6%, solve for t (years).
100
5%
If P=$2500, I=$625 after 5 years, what was r?
100
Interest is charged on the remaining principal, so lower balance means less interest
Why do early payments reduce total simple interest on some loans?
200
About $1,123.60
Use A=P(1+r/n)^(nt): P=$1000, r=6%, n=1, t=2. Find A (approx).
200
Compound interest
Which grows faster over time at same APR: simple or compound interest?
200
The number of compounding periods per year
What does n represent in the compound-interest formula?
200
Higher (all else equal)
If interest compounds monthly instead of annually, the future value is usually...
200
Compounding
A savings account doubles because interest earns interest. This is called what?
300
A loan used to buy a home, repaid in installments over time
Define a mortgage in one sentence.
300
Interest, plus taxes/insurance (PITI)
Monthly mortgage payments typically include principal and what two common items?
300
Interest portion usually decreases while principal portion increases
An amortization schedule shows what happens to principal and interest over time?
300
It decreases
If you pay extra principal each month, what usually happens to total interest paid?
300
An upfront amount paid toward the home price at purchase
What is a down payment?
400
Mean
Name the statistic that represents the average of data values.
400
Median
Name the middle value when data are ordered.
400
Mode
Name the most frequently occurring value.
400
Population = entire group; sample = subset of the group
What is the difference between a population and a sample?
400
How spread out data values are around the mean
What does standard deviation measure?
500
Selection bias (sampling bias)
A biased sample is not representative because of what issue?
500
An equal chance of being selected
Simple random sampling gives each member of the population what?
500
Categorical (qualitative)
A variable that is categorized (e.g., major) is what type?
500
Quantitative (numerical)
A variable measured numerically (e.g., age) is what type?
500
Descriptive summarizes data; inferential uses a sample to draw conclusions
What is the difference between descriptive and inferential statistics?
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