Question
In: Statistics and Probability
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.
Solutions
orchestra answered 1 year agoRelated Solutions
PAYING OFF CREDIT CARDS Simon recently received a credit card with an 15% nominal interest rate....
PAYING OFF CREDIT CARDS
Simon recently received a credit card with an 15% nominal
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If Simon makes the minimum monthly payment and makes no other
charges, how many months will it be before he pays off the card? Do
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month(s)
If Simon makes monthly payments...
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As part of an annual review of its accounts, a discount
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$39,900, with a sample standard deviation of $8,300. (Use t
Distribution Table.) What is a 99% confidence interval for the mean
account valuation of the population of customers? (Round your
answers to the nearest dollar amount.)
As part of an annual review of its accounts, a discount brokerage selects a random sample...
As part of an annual review of its accounts, a discount
brokerage selects a random sample of 28 customers. Their accounts
are reviewed for total account valuation, which showed a mean of
$38,300, with a sample standard deviation of $8,400. (Use t
Distribution Table.)
What is a 98% confidence interval for the mean account valuation
of the population of customers? (Round your answers to the
nearest dollar amount.)
98% confidence interval for the mean account valuation is
between $ and $...
As part of an annual review of its accounts, a discount brokerage selects a random sample...
As part of an annual review of its accounts, a discount
brokerage selects a random sample of 27 customers. Their accounts
are reviewed for total account valuation, which showed a mean of
$32,500, with a sample standard deviation of $8,600. (Use t
Distribution Table.)
What is a 95% confidence interval for the mean account valuation
of the population of customers? (Round your answers to the
nearest dollar amount.)
95% confidence interval for the mean account valuation is
between $ and $ .
As part of an annual review of its accounts, a discount brokerage selects a random sample...
As part of an annual review of its accounts, a discount
brokerage selects a random sample of 28 customers. Their accounts
are reviewed for total account valuation, which showed a mean of
$32,300, with a sample standard deviation of $8,500. (Use t
Distribution Table.) What is a 98% confidence interval for the mean
account valuation of the population of customers? (Round your
answers to the nearest dollar amount.) 98% confidence interval for
the mean account valuation is between $ ___...
The annual interest rate on a credit card is 18% with interest compounded monthly. If a...
The annual interest rate on a credit card is 18% with interest
compounded monthly. If a payment of $100 is made at the end of each
month, how many months will it take to pay off an unpaid balance of
$2,583.56 (assuming no additional purchases are made)?
PAYING OFF CREDIT CARDS Simon recently received a credit card with an 17% nominal interest rate....
PAYING OFF CREDIT CARDS
Simon recently received a credit card with an 17% nominal
interest rate. With the card, he purchased an Apple iPhone 5 for
$500. The minimum payment on the card is only $10 per month.
If Simon makes the minimum monthly payment and makes no other
charges, how many months will it be before he pays off the card? Do
not round intermediate calculations. Round your answer to the
nearest month.
? month(s)
If Simon makes monthly...
Determine the actual annual interest rate on a $100,000 line of credit with an annual percentage...
Determine the actual annual interest rate on a
$100,000 line of credit with an annual percentage rate of 10%
compounded monthly. The bank requires that a 5% compensating
balance be placed in an interest-bearing account that pays an
annual percentage rate of 1.5% compounded monthly. The average
daily balance is anticipated to be $75,000, excluding the
compensating balance and interest due on the line of credit.
The annual interest rate on a credit card is 14.99%. If a payment of $300.00 is...
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Simple and compound interest rate 8. Determine the effective interest rate, based on a 15% annual...
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8. Determine the effective interest rate, based on a 15% annual
rate with monthly capitalization:
a) effective monthly rate,
b) effective quarterly rate,
c) semi-annual effective rate,
d) annual rate effective.
9. Determine the effective annual interest rate, based on the
nominal interest rate that is provided:
a) 9% per year with capitalization annually,
b) 6.8% per year with capitalization semi-annually,
c) 11% per year with capitalization monthly.
10. Determine the semi-annual effective interest rate,...
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