Question

QUESTION 10 A large regional department store is evaluating the effectiveness of its credit card program, which costs it approximately $1m per year to administer. The store believes that for the credit card program to be worthwhile, the administrative costs should be no more than 10% of the total of the average annual account balances. Rather than reviewing each of the 15,000 individual accounts, the store's analysts randomly selected a sample of 500 average annual balances from the frame. The sample mean and sample standard deviation were $215.75 and $55.90, respectively. Construct a 95% confidence interval for the mean of the average annual credit account balances. TT T Arial 3 (12) T.EE

Answer 1

Answers Given that : Sampie mean 215.75 Sampie standard deviation = 5 = 55.90 n = 500 95% contidence interval for the mean => ł + 2/2 un S d=1-0.95 0.05 1/2 = 0.05/2 22/2 = Zo.o25 = 1.96 (trom indlmar distai bution) table 55.90 => 215.75 + 1.96x J500 215.75 + 4.899 -> (210.85 , 220.65 ) . Upper level of the mean 220.65 . lower level of the mean 210.85