Question 525639: A rental agent claims that the mean monthly rent, , for apartments on the east side of town is less than $750 . A random sample of 16 monthly rents for apartments on the east side has a mean of $748 , with a standard deviation of $22. If we assume that the monthly rents for apartments on the east side are normally distributed, is there enough evidence to conclude, at the 0.05 level of significance, that is less than $750 ?
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! A rental agent claims that the mean monthly rent, , for apartments on the east side of town is less than $750.
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A random sample of 16 monthly rents for apartments on the east side has a mean of $748 , with a standard deviation of $22.
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If we assume that the monthly rents for apartments on the east side are normally distributed, is there enough evidence to conclude, at the 0.05 level of significance, that is less than $750?
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Ho: u >= 750
Ha: u < 750 (claim)
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x-bar = 748
Test statistic: t(748) = (748-750)/[22/sqrt(16)] = -0.3636
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p-value = P(t<-0.3535 when df = 15) = tcdf(-100,-0.3636,15) = 0.3606
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Since the p-value is greater than 5%, fail to reject Ho at
the 5% level of significance.
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The test results do not support the claim)
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Cheers,
Stan H.
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