SOLUTION: The average attrition rate of a customer based company is 20% with a standard deviation of 7% (based on the past data). To test this a sample of 100 was taken and 23% average attri

Algebra ->  Probability-and-statistics -> SOLUTION: The average attrition rate of a customer based company is 20% with a standard deviation of 7% (based on the past data). To test this a sample of 100 was taken and 23% average attri      Log On


   

Question 1030980: The average attrition rate of a customer based company is 20% with a standard deviation of 7% (based on the past data). To test this a sample of 100 was taken and 23% average attrition rate was found. What can be concluded from about the attrition rate at 10% significance level?
The attrition rate is 23% now
The attrition rate is more than 20% now
The attrition rate is same as 20%
The attrition rate is less than 20% now
I tried this and got the below answer.Can you please check if this is correct.
H0-No diff in attrition rate
H1:Increase in attrinium rate
x>=23=1-(x<=23)
==1-NORM.DIST(23,20,7/(100)^0.5,TRUE)
=9.10765E-06 <0.1
reject null hypothesis
Is option (a) the correct answer that the attrition rate is 23% now.
Thanks
Answer by ewatrrr(24785) About Me  (Show Source):
You can put this solution on YOUR website!


Hi,

re: Your reply (Idea being..with a 7% SD ... the 3% difference in the test sample

would be expected to be consistent with the average of 20%) 

I.  Yes, .07/sqrt(100)  

II.  With Excel function: P(z <4.29)) = NORMDIST(4.29)  = .999



Ho: p = 0.2

Ha: p > 0.2 (claim)

sample proportion = .23

z(.23) = (.23-.2)/.07/sqrt(100) = .03/.007  = 4.29

p-value = P(z < 4.29) = .999 OR 99.9% (10% significance level)



p-value greater than 10%, accept Ho

The attrition rate is same as 20%