A sample of 64 account balances from a credit company showed an average daily balance of $1040 . The standard deviation of the population is known to be $200 . We are interested in determining if the mean of all account balances (i.e., population mean) is significantly different from $1000

a. Develop the appropriate hypotheses for this problem.
b. Compute the test statistic.
c. Compute the p-value.
d. Using the p-value approach and ? = .05, test the above hypotheses. What is your conclusion?
e. Using the critical value approach and ? = .05, test the hypotheses. What is your conclusion?


a. H0: ? = $1000
Ha: ? ? $1000
b. 1.60
c. .1096
d. p-value = .1096 > ? = .05 . The null hypothesis is not rejected; no evidence to show that the mean is significantly different from $1000.
e. z = 1.60 is between -1.96 and 1.96; the null hypothesis cannot be rejected; there is no evidence that the mean is significantly different from $1000.

Business

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