Question

In a study entitled How Undergraduate Students Use Credit Cards, Sallie Mae reported that undergraduate students have a mean credit card balance of $3173. This figure was an all-time high and had increased 44% over the previous five years. Assume that a current study is being conducted to determine whether it can be concluded that the mean credit card balance for undergraduate students has continued to increase to the April 2009 report.

Based upon previous studies, the population standard deviation was $1000.

A sample was selected of 180 undergraduate students with a sample mean credit card balance of $3325.

Note: use this excel workbook (Sheet "Known SD - Cards") to assist you.

https://drive.google.com/file/d/18bWI0MaoO6VAdhGI6SW0CoE6ws3XwCs3/view

. What is the hypothesis test of the mean ?

	Ho: μ =< 3173 vs. Ha: μ > 3173
	Ho: μ = 3325 vs. Ha: μ ≠ 3325
	Ho: μ = 3173 vs. Ha: μ ≠ 3173
	Ho: μ >= 3325 vs. Ha: μ < 3325
	Ho: μ =< 4569.12 vs. Ha: μ > 4569.12
	Ho: μ >= 3173 vs. Ha: μ < 3173
	Ho: μ =< 3325 vs. Ha: μ > 3325

B. What is the type of 'tail' test ?

	Lower (Left) Tail
	Two Tail
	Upper (Right) Tail

C. What is the p-value? (please round up to three decimal places)

D. With a confidence level of .05, what is your decision regarding H_o ?

	Do NOT Reject Ho
	Reject Ho

E. Based upon the data and a confidence level of .05, is the following statement true or false ?

"The current population mean credit card balance for undergraduate students has increased compared to the previous all-time high of $3173 reported in April 2009."

	True
	False

F. With a confidence level of .01, what is your decision regarding H_o ?

	Do NOT Reject Ho
	Reject Ho

Answer 1

What is the hypothesis test of the mean ?

H₀ :-

H₁ :-  

Option 1^st is correct

What is the type of 'tail' test ?

Since Alternative hypothesis is (>) greater than, hence it is one tail test

Option 3^rd is correct ( Upper right tail )

What is the p-value? (please round up to three decimal places)

Test Statistic :-

P ( X > 3325) = 1 - P ( X < 3325) Since it is upper right tail

= 1 - P ( Z < 2.04 )

= 1 - 0.979

P ( X > 3325) = 0.021      

With a confidence level of .05, what is your decision regarding Ho ?

Test Criteria :-

Reject null hypothesis if Z > Z

Z = = 1.64

Z > Z    2.04 > 1.64, hence we reject null hypothesis

Option 2^nd is correct Reject H₀

Part E) Based upon the data and a confidence level of .05, is the following statement true or false ?

Since our decision is to accept alternative hypothesis i.e

We can say that mean credit card balance for undergraduate students has increased compared to the previous all-time high of $3173 reported in April 2009."

So the statement is true

Option 1^st is correct

Part F) With a confidence level of .01, what is your decision regarding Ho ?

Reject null hypothesis if Z > Z

Z = = 2.33

Z > Z     2.04 < 2.33, hence we fail to reject null hypothesis

Option 1^st is correct Do not Reject H₀