Question

Question 3

1. The manager of a department store believes that the mean annual income of the store's credit card customers is at least $21,000. For a sample of 90 customers the mean and standard deviation of income were found to be $20700 and $1450 respectively.
   (1) Use the tables in the textbook to determine the critical value for the test statistic at the 5% level of significance. State your answer correct to three decimal places. Blank 1
   (2) Determine the calculated test statistic correct to 3 decimal places Blank 2

Answer 1

a)

Ho :   µ =   21000      
Ha :   µ >   21000       (Right tail test)
degree of freedom=   DF=n-1=   89

Level of Significance ,    α =    0.05

critical t value, t* =        1.662

.............

b)

sample std dev ,    s =    1450.0000
Sample Size ,   n =    90
Sample Mean,    x̅ =   20700

Standard Error , SE = s/√n =   1450.0000   / √    90   =   152.8434      
t-test statistic= (x̅ - µ )/SE = (   20700.000   -   21000   ) /    152.8434   =   -1.963

................

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