SOLUTION: A survey of households for a recent year showed a sample mean credit card debt was $8,758 with a standard deviation of $1,362. Five years earlier, another survey showed an average
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Question 1178198: A survey of households for a recent year showed a sample mean credit card debt was $8,758 with a standard deviation of $1,362. Five years earlier, another survey showed an average credit card debt was $8,218 with a standard deviation of $1,422. Both surveys used a sample size of 35 households. Is there evidence to conclude that the average credit card debt has increased? Use á = 0.05.
a. State the hypotheses.
b. Find the critical value.
c. Compute the test statistic.
d. Make the decision.
e. Summarize the results.
Answer by Boreal(15235) (Show Source): You can put this solution on YOUR website!
Ho: Current mean <= prior mean
Ho: Current mean > prior mean
alpha=0.05 p(reject Ho|Ho true}
Test statistic is t df=68,0.95 1-way with critical value t>1.668
calculation t=(x bar-mean)/sqrt ((s1^2/n1)+(s2^2/n2))
=540/sqrt (110775.09)
=1.622
fail to reject Ho and insufficient evidence to support claim that the average credit card debt has increased
p-value=0.055
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