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.
Answer : C
To arrive at the correct answer, let's analyze the data and apply some logical reasoning.
1. The report mentions two different interest rates: 1.0% and 3.0%.
2. At 1.0% interest rate, only 8% of wage earners consider it worthwhile to keep money in a savings account.
3. At 3.0% interest rate, 36% of wage earners believe it worthwhile to keep money in a savings account.
4. The margin of error for both studies is 4 percentage points.
Based on these data points, we can infer the following conclusions:
1. The percentage of wage earners finding it worthwhile to keep money in a savings account increases as the interest rate increases.
2. The increase in the interest rate from 1.0% to 3.0% led to a substantial increase in the percentage of wage earners considering it worthwhile to save money.
3. The margin of error, being 4 percentage points, means that there is some degree of uncertainty in the exact values, but it does not negate the overall trend observed.
Given this information, the proper conclusion from the studies is that increasing the interest rate will increase the number of persons saving money in a savings account. Therefore, the correct answer is C.