Question

In: Statistics and Probability

Banking fees have received much attention during the recent economic recession as banks look for ways...

Banking fees have received much attention during the recent economic recession as banks look for ways to recover from the crisis. A sample of 31 customers paid an average fee of $12.27

per month on their​ interest-bearing checking accounts. Assume the population standard deviation is $1.82.

Construct a 90% confidence interval to estimate the average fee for the population.

The 90​% confidence interval has a lower limit of ​A.$____ and an upper limit of B.$______

a?

b?

Solutions

Expert Solution

Solution :

Given that,

= $12.27

= $1.82

n = 31

At 90% confidence level the z is ,

= 1 - 90% = 1 - 0.90 = 0.10

/ 2 = 0.10 / 2 = 0.05

Z/2 = Z0.05 = 1.645

Margin of error = E = Z/2* ( /n)

= 1.645 * ( 1.82/ 31)

= 0.5377

At 90% confidence interval estimate of the population mean is,

- E < < + E

12.27 - 0.5377 < < 12.27 + 0.5377

11.7323< < 12.8077

lower limit = 11.7323

upper limit = 12.8077

orchestra answered 3 years ago
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