Question

In a sample of 80 borrowers who borrowed less than $1,000 from an online instant lender, 20 repaid late while in a sample of 120 who borrowed over $1,000, 44 repaid late. Is there enough evidence to conclude that those who borrow less than $1,000 are less like likely to repay late? Test at  α =0.025. α =0.025.

Standard Normal Distribution Table

a. Calculate the test statistic. Let p1p1 be the proportion for borrowers who borrowed less than $1,000 and p2p2 be those who borrowed over $1,000.

z=z=

Round to two decimal places if necessary

Enter 0 if normal approximation cannot be used

b. Determine the critical value(s) for the hypothesis test.

• +

Round to two decimal places if necessary

Enter 0 if normal approximation cannot be used

c. Conclude whether to reject the null hypothesis or not based on the test statistic.

Reject

Fail to Reject

Cannot Use Normal Approximation

Answer 1

(a)

(b)

(c) By decision rule,

Fail to Reject H0.