Question 278620: The average salary of graduates entering the actuarial field is reported to be $40,000. You sample 20 graduates and find the average salary to be $43,228 with a standard deviation of $4,000. At a 95% level of confidence is the statement regarding the average salary of $40K an accurate statement? (www.beanactuary.org) (T-test)
Answer by stanbon(75887)   (Show Source):
You can put this solution on YOUR website! The average salary of graduates entering the actuarial field is reported to be $40,000.
You sample 20 graduates and find the average salary to be $43,228 with a standard deviation of $4,000.
At a 95% level of confidence is the statement regarding the average salary of $40K an accurate statement? (www.beanactuary.org) (T-test)
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sample mean: 43228
standard error: invT(0.975,19)*4000/sqrt(20) = 2.0930*894.43 = 1872
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95% CI: 43228-1872 < u < 43228+1872
95% CI: 41356 < u < 45100
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The statement does not appear to be accurate.
We are 95% certain u is in the interval listed; 40,000 is
not in that interval.
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Cheers,
Stan H.
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