A U.S. government report stated that, “With bank interest rates around
1.0%, 8% of wage earners believe it worthwhile to keep money in a
savings account. However, at 3.0% interest, 36% of wage earners believe
it worthwhile to keep money in a savings account. The margin of error
for both studies is 4 percentage points.”. A proper conclusion from the
studies is that:
A. increasing the interest rate from 1% to 3% will increase the number of
persons saving money in a savings account.
B. increasing the interest rate may well have no effect on the number of
persons saving money in a savings account.
C. increasing the interest rate will increase the number of persons saving
money in a savings account.
D. the interest rate difference between 1% and 3% may well have no effect
on the number of persons saving money in a savings account.
Ans: D
To properly analyze the given data and determine the correct conclusion, let's break down the information and the margin of error provided.
According to the U.S. government report, when the bank interest rate is 1%, only 8% of wage earners find it worthwhile to keep money in a savings account. However, when the interest rate increases to 3%, the percentage of wage earners who believe it is worthwhile to keep money in a savings account increases to 36%.
The margin of error for both studies is stated to be 4 percentage points. This means that the actual percentage of wage earners who find it worthwhile to keep money in a savings account could be 4 percentage points higher or lower than the reported percentages.
Based on this information, we can conclude that there is a possibility that the interest rate difference between 1% and 3% has no effect on the number of persons saving money in a savings account. This is because the margin of error of 4 percentage points means that the actual percentage of wage earners who find it worthwhile to keep money in a savings account at each interest rate could be within 4 percentage points of the reported percentages.
Therefore, the proper conclusion from the studies is option D: the interest rate difference between 1% and 3% may well have no effect on the number of persons saving money in a savings account.