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Simple Interest
Compound Interest
Mortgages
Basic Stats Terms
Sampling & Studies
100
$40
Use I = Prt. Find the simple interest on $500 at 8% for 1 year.
100
A = P(1 + r/n)^(nt)
Write the compound interest formula for amount A.
100
A loan used to buy a home
What is a mortgage?
100
The entire group of interest
What is a population?
100
A sample where each member has an equal chance of selection
What is a simple random sample?
200
$540
If $500 earns $40 simple interest in 1 year, what is the total amount?
200
$1,102.50
Find the amount on $1000 at 5% for 2 years, compounded annually.
200
The interest rate (and typically the regular payment)
In a fixed-rate mortgage, what stays the same?
200
A subset of the population
What is a sample?
200
A convenience sample
Which kind of sample is often biased because it is easy to reach?
300
6%
If $90 simple interest is earned on $750 in 2 years, what annual rate was used?
300
Monthly compounding
Which earns more on the same principal and rate: annual or monthly compounding?
300
The upfront amount the buyer pays toward the home price
What is a down payment?
300
A numerical summary of a population
What is a parameter?
300
The measured outcome in a study
What is the response variable?
400
3 years
How long will it take $1200 at 5% simple interest to earn $180?
400
The number of compounding periods per year
In A = P(1 + r/n)^(nt), what does n represent?
400
Interest
Early in an amortized mortgage, most of each payment usually goes to what?
400
A numerical summary of a sample
What is a statistic?
400
The variable used to explain or predict changes in the response
What is the explanatory variable?
500
$120
Simple vs. compound on $1000 at 4% for 3 years: what is the simple interest only?
500
9 years
Using the Rule of 72, money at 8% interest doubles in about how many years?
500
A 30-year mortgage
Which usually has the lower monthly payment but the higher total interest: a 15-year or 30-year mortgage?
500
Favorite color = qualitative; hours studied = quantitative
Classify “favorite color” and “hours studied.”
500
An experiment (with good random assignment)
Observational study or experiment: which one can better support cause-and-effect?