Question

A regional U.S. commercial bank issues both Visa and MasterCard credit cards. As a part of its annual review of the profitability of each type of credit card, the bank randomly samples 24 customers to measure the average quarterly charges per card. It has completed its analysis of the Visa card accounts and is now focused on its MasterCard customers. A random sample of 24 MasterCard accounts shows the following spending per account (rounded to the nearest dollar):

$2,869

$2,549

$2,230

$1,994

$3,770

$3,267

$2,178

$2,768

$2,854

$3,013

$3,032

$3,853

$2,750

$2,707

$3,485

$2,064

$2,574

$2,794

$2,679

$3,244

$2,972

$1,189

$2,010

$2,738

a) If the bank is interested in developing a 95% confidence interval estimate of mean quarterly spending, what distribution will be used to determine the critical value?

b) Construct the 95% confidence interval estimate for the population mean of quarterly MasterCard spending for the bank’s customers.

Answer 1

a) Here we have given the sample of 24 observations.

From the given data we can calculate sample standard deviation s, here population standard deviation is not given.

Hence we can use t distribution here.

b)

Hope this will help you. Thank you :)