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Interest rates and mortgages 2013 Since 1985, average mortgage interest rates have fluctuated from a low of nearly 3% to a high of over 14%. Is there a relationship between the amount of money people borrow and the interest rate that's offered? Here is a scatterplot of Mortgage Loan Amount in the United States (in trillions of 2013 dollars) versus yearly Interest Rate since 1985. The Q2 correlation is -0.80. 60 50 40 30 20 6. 10 12 Interest Rate (%) a) Describe the relationship between Mortgage Loan Amount and Interest Rate. b) If we standardized both variables, what would the correlation coefficient between the standardized variables be? c) If we were to measure Mortgage Loan Amount in billions of dollars instead of trillions of dollars, how would the correlation coefficient change? Amount Borrowed (S2013 T)

Interest rates and mortgages 2013 Since 1985, average mortgage interest rates have fluctuated from a low of nearly 3% to a high of over 14%. Is there a relationship between the amount of money people borrow and the interest rate that's offered? Here is a scatterplot of Mortgage Loan Amount in the United States (in trillions of 2013 dollars) versus yearly Interest Rate since 1985. The Q2 correlation is -0.80. 60 50 40 30 20 6. 10 12 Interest Rate (%) a) Describe the relationship between Mortgage Loan Amount and Interest Rate. b) If we standardized both variables, what would the correlation coefficient between the standardized variables be? c) If we were to measure Mortgage Loan Amount in billions of dollars instead of trillions of dollars, how would the correlation coefficient change? Amount Borrowed (S2013 T)

Algebra & Trigonometry with Analytic Geometry
Algebra & Trigonometry with Analytic Geometry
13th Edition
ISBN:9781133382119
Author:Swokowski
Publisher:Swokowski
Chapter2: Equations And Inequalities
Section2.2: Applied Problems
Problem 13E
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Interest rates and mortgages 2013 Since 1985, average mortgage interest rates have fluctuated from a low of nearly 3% to a high of over 14%. Is there a relationship between the amount of money people borrow and the interest rate that's offered? Here is a scatterplot of Mortgage Loan Amount in the United States (in trillions of 2013 dollars) versus yearly Interest Rate since 1985. The Q2 correlation is -0.80. 60 50 40 30 - 20 6 8 10 12 Interest Rate (%) a) Describe the relationship between Mortgage Loan Amount and Interest Rate. b) If we standardized both variables, what would the correlation coefficient between the standardized variables be? c) If we were to measure Mortgage Loan Amount in billions of dollars instead of trillions of dollars, how would the correlation coefficient change? Amount Borrowed ($2013 T)
Transcribed Image Text:Interest rates and mortgages 2013 Since 1985, average mortgage interest rates have fluctuated from a low of nearly 3% to a high of over 14%. Is there a relationship between the amount of money people borrow and the interest rate that's offered? Here is a scatterplot of Mortgage Loan Amount in the United States (in trillions of 2013 dollars) versus yearly Interest Rate since 1985. The Q2 correlation is -0.80. 60 50 40 30 - 20 6 8 10 12 Interest Rate (%) a) Describe the relationship between Mortgage Loan Amount and Interest Rate. b) If we standardized both variables, what would the correlation coefficient between the standardized variables be? c) If we were to measure Mortgage Loan Amount in billions of dollars instead of trillions of dollars, how would the correlation coefficient change? Amount Borrowed ($2013 T)
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