Question

A study of 25 graduates of 4-year public colleges revealed the mean amount owed by a student in student loans was $55,051. The standard deviation of the sample was $7,568.

a. Compute a 90% confidence interval for the population mean.


b. Is it reasonable to conclude the population mean is $55,000 ?.

Answer 1

Step 1

The data represent amount.

A 90% confidence interval for the population mean is,

First, compute t-critical value then find confidence interval.

The t critical value for the 90% confidence interval is,

The sample size is small and two-tailed test. Look in the column headed and the row headed in the t distribution table by using degree of freedom is,

The t critical value for the 90% confidence interval is 1.711.

A 90% confidence interval for the population mean is .

Step 2

It is reasonable to conclude that mean of the population is actually $55000 due to a 90% confidence intrerval for population mean is between $52461.23 and $57640.77 does include $55000.

The data represent amount.

A 90% confidence interval for the population mean is,

First, compute t-critical value then find confidence interval.

The t critical value for the 90% confidence interval is,

The sample size is small and two-tailed test. Look in the column headed and the row headed in the t distribution table by using degree of freedom is,

The t critical value for the 90% confidence interval is 1.711.

A 90% confidence interval for the population mean is .

It is reasonable to conclude that mean of the population is actually $55000 due to a 90% confidence intrerval for population mean is between $52461.23 and $57640.77 does include $55000.