SOLUTION: a real estate agent believes that the average closing cost of purchasing a new home is $6500 over the purchase price . She selects 40 new home sales at random and finds that the av

Question 447602: a real estate agent believes that the average closing cost of purchasing a new home is $6500 over the purchase price . She selects 40 new home sales at random and finds that the average closing costs are $6600. the standard deviation of the population is $120. Test her belief at a=0.05
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Answer by stanbon(75887) (Show Source): You can put this solution on YOUR website!
a real estate agent believes that the average closing cost of purchasing a new home is $6500 over the purchase price . She selects 40 new home sales at random and finds that the average closing costs are $6600. the standard deviation of the population is $120. Test her belief at a=0.05
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Ho: u = 6500
Ha: u is not equal to 6500
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t(6600) = (6600-6500)/[120/sqrt(40)] = 5.2705
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p-value = 2*P(t > 5.2705 when df = 39) = 0.0000053169..
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Conclusion: Since the p-value is less than 5%, reject Ho
at the 5% significance level.
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Cheers,
Stan H.
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