Question

Warren County Telephone Company claims in its annual report that "the typical customer spends $60 per month on local and long-distance service." A sample of 12 subscribers revealed the following amounts spent last month.

$63

$65

$64

$67

$56

$65

$68

$63

$64

$62

$55

$67

(a)	What is the point estimate of the population mean? (Round your answer to 3 decimal places. Omit   the "$" sign in your response.)

Estimated population mean

$

(b)	Develop a 99 percent confidence interval for the population mean. (Round your answers to 3 decimal places. Omit the "$" sign in your response.)

Confidence interval for the population mean

$  and $

(c)	Is the company's claim that the "typical customer" spends $60 per month reasonable?
	(Click to select)YesNo

Answer 1

a) Since we know that

Where n is the number of data points
Now

and n = 12
This implies that



Since we know that

b)
Sample size (n) = 12
Standard deviation (s) = 4.048
Confidence interval(in %) = 99

Since we know that

Required confidence interval = (63.25-3.6293, 63.25+3.6293)
Required confidence interval = (59.6207, 66.8793)
c) Yes, because 60 falls in the confidence interval we calculated above

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