On its website, the Statesman Journal newspaper (Salem, Oregon, 2005) reports mo

Question

On its website, the Statesman Journal newspaper (Salem, Oregon, 2005) reports mortgage loan interest rates for 30-year and 15-year ftixed-rate mortgage loans for a number of wiltamette valey sze positive value. Round nstitutions Of interest is whether there is any systematic diffterence between 30-year rates and 15-year rales institution. Use the table to compare the 30-year rates and the 15-year rates Aiso, calculate the average of the differences be (expressed as annual percentage rate or APR) and if there is, what is the nal l difference The following table displays the 30 year rate and the 15 year rate for e ach of nine lending instfutions. Also given is the difference between the 30-year rate and the 15-year rale for t ending w tween the rales. (Input the amount as

Explanation / Answer

Average rate of 30 year is 4.66077 while for 15 years it is 5.07443

1 So overall , the 30 year rates are less than 15 year rates

From the box plot it is clear that difference between 1st quartile n 3rd quartile is more for 30 years than 15 years

This imply variability is more for 30 year than 15 year

Average of the differences is given as = sum of differences/9

= -0.41366

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