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Ophelia O’Brien, VP of Consumer Credit of America First Banks (AFB), has implemented a ‘fastback’ to...

Ophelia O’Brien, VP of Consumer Credit of America First Banks (AFB), has implemented a ‘fastback’ to keep her informed of the default rate on personal loans at the AFB member banks. On each Friday, the default rate is calculated for a sample of 500 personal loans. Last Friday’s sample contained 30 defaulted loans. The 90% confidence interval for the population proportion is what?
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Given sample size n 500 loans Out of n, x-30 defaulted loans p- x/n 30/500 0.06 Standard error of proportion SE= p(1-p) 0.06(1-0.00-0.0106 2 90% confidence level z= 1.645 Margin of Errorz*SE 1.645*0.0106- 0.0174 90% confidence interval of population proportion is (p-2 SE, p+ 2 SE) (0.06-0.0174, 0.06+0.0174) (0.0426, 0.0774) 90% confidence interval is (0.0426, 0.0774)

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