Question

In: Statistics and Probability

The average annual premium for automobile insurance in the United States is $1520. A representative sample...

The average annual premium for automobile insurance in the United States is $1520. A representative sample of annual premiums for the state of Michigan is contained in the Excel Online file below. Assume the population is approximately normal. Construct a spreadsheet to answer the following questions.

a. Provide a point estimate of the mean annual automobile insurance premium in Michigan. To the nearest dollar.

b. Develop a 95% confidence interval for the mean annual automobile insurance premium in Michigan.To the nearest cent.

c. Does the 95% confidence interval for the annual automobile insurance premium in Michigan include the national average for the United States?

We would be ___?__% confident that auto insurance premiums in Michigan are __?__ the national average.

Annual Premium
1906
3139
2317
2786
2558
2977
2682
2540
2656
2670
2319
2817
2917
2540
2664
2196
2549
2189
2398
2471

Solutions

Expert Solution

I used Excel to solve this question.

Step.1 First enter data in excel.

Step.2 Go to 'Data' ---> 'Data Analysis' ---> Select 'Descriptive Statistic'

Step.3 New window pop-up on screen. Enter input range and output range. you will get folling output:

Annual Premium Annual Premium
1906
3139 Mean 2564.55
2317 Standard Error 65.90221923
2786 Median 2553.5
2558 Mode 2540
2977 Standard Deviation 294.7236842
2682 Sample Variance 86862.05
2540 Kurtosis 0.24152367
2656 Skewness -0.203487349
2670 Range 1233
2319 Minimum 1906
2817 Maximum 3139
2917 Sum 51291
2540 Count 20
2664 Confidence Level(95.0%) 137.9349298
2196
2549 Lower limit = mean - Confidence Level(95.0%) 2426.61507
2189 Upper limit = mean + Confidence Level(95.0%) 2702.48493
2398
2471


a.

The  point estimate of the mean annual automobile insurance premium in Michigan is 2565

b.

95% confidence interval is ( 2426.62 , 2702.48 )

c.

The 95% confidence interval for the annual automobile insurance premium in Michigan does not include the national average for the United States.

We would be 95% confident that auto insurance premiums in Michigan are not equal to the national average.


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