Question

In: Statistics and Probability

According to Sallie Mae, students graduating from college have an average credit card more than $4150....

According to Sallie Mae, students graduating from college have an average credit card more than $4150. In a random sample of 50 graduating seniors the average credit card debt was $4500 and the standard deviation was $1200. Do the evidence support Sallie Mae’s claim?

Set up the null and alternate hypotheses to test Sallie Mae’s claim.

Compute an appropriate test statistic.

What is the p-value? Conclude at α = 0.05. Explain.

Solutions

Expert Solution

H0: = 4150

H1: > 4150

The test statistic t = ()/(s/)

                             = (4500 - 4150)/(1200/)

                            = 2.06

P-value = P(T > 2.06)

             = 1 - P(T < 2.06)

             = 1 - 0.9776

             = 0.0224

Since the P-value is less than the significance level(0.0224 < 0.05),we should reject the null hypothesis.

So there is sufficient evidence to support Sallie Mae's claim that students graduating from college have an average credit card more than $4150

orchestra answered 1 year ago
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