A person selects a random sample of 15 credit cards and determines the annual interest rate,...

A person selects a random sample of 15 credit cards and determines the annual interest rate, in percent, of each. The sample mean is 12.42% and the sample standard deviation is 1.3%. Assume that the rates are approximately normally distributed.

a) Construct and interpret a 99% confidence interval for the population mean credit card annual interest rate. To show work, write out the following:

-The given numbers with their corresponding variables.
-The formula that's used to calculate the confidence interval. Also give a short explanation stating why you chose the formula that you did.
-The built in calculator program that you used to compute your answer.

b) Interpret the confidence interval from (a). Include the following:
-The confidence level.
-The population parameter of interest (in the context of the problem).

-The lower and upper bounds of the C.I., along with the units.

c) Suppose that someone claimed that the population mean credit card annual interest rate is at least 14%. Based on your confidence interval in (a), is it reasonable to believe that the population mean credit card annual interest rate is at least 14%? Explain why or why not using a complete sentence.

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Expert Solution

orchestra answered 1 year ago

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