SOLUTION: A telephone company claims that less than 20% of all college students use prepaid phone cards. A random sample of 250 students revealed that 41 of them used prepaid phone cards.

Question 438588: A telephone company claims that less than 20% of all college students use prepaid phone cards. A random sample of 250 students revealed that 41 of them used prepaid phone cards. Test the company's claim at the 0.05 level of significance.
Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
A telephone company claims that less than 20% of all college students use prepaid phone cards. A random sample of 250 students revealed that 41 of them used prepaid phone cards. Test the company's claim at the 0.05 level of significance.
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Ho: p >= 0.20
Ha: p < 0.20 (claim)
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P-hat = 41/250 = 0.164
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test stat: z(0.164) = (0.164-0.20)/sqrt(0.2*0.8/250) = -1.4230
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p-value = P(z < -1.4230) = 0.7737
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Since the p-value is greater than 5%, fail to reject Ho.
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The test supports the claim.
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Cheers,
Stan H.
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