Question

A bank manager wants to know the mean amount of mortgage paid per month by homeowners in an area. A random sample of 120 homeowners selected from this area showed that they pay an average of $1575 per month for their mortgages. The population standard deviation of such mortgages is $215.
a. Find a 97% confidence interval for the mean amount of mortgage paid per month by all homeowners in this area.
b. Suppose the confidence interval obtained in part a is too wide. How can the width of this interval be reduced? Discuss all possible alternatives. Which alternative is the best?


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  • CreatedAugust 25, 2015
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