Question

In a study entitled How Undergraduate Students Use Credit Cards, it was reported that undergraduate students have a mean credit card balance of $3,316 . This figure was an all-time high and had increased 49% over the previous five years. Assume that a current study is being conducted to determine if it can be concluded that the mean credit card balance for undergraduate students has continued to increase compared to the report. Based on previous studies, use a population standard deviation σ = $1,400. a. State the null and alternative hypotheses. h0:u >/< 3,316? ha:u >/< 3,316? b. What is the p-value for a sample of 230 undergraduate students with a sample mean credit card balance of $3,617 ? If your answer is zero enter "0". z value (to 2 decimals) p-value (to 4 decimals) c. Using a 0.10 level of significance, what is your conclusion? Conclude that student mean credit card debt is than $3,316.

Answer 1

Please don't hesitate to give a "thumbs up" in case you're satisfied with the answer
a.

Ho: Mu <= 3316

Ha: Mu > 3316

b.

Sigma = 1400/sqrt(230)

Xbar = 3617

Z = (Xbar - Mu)/(Srdev) = (3617-3316)/(1400/sqrt(230)) = 3.261

So, p-value = P(Z>3.261) = 0.00056 or 0

c. using a .10 level of significance the conclusion is that we reject Ho and say that the claim that the mean credit card balance for undergraduate students has continued to increase compared to the report IS CORRECT