Question: Credit card companies lose money on cardholders who fail to
Credit card companies lose money on cardholders who fail to pay their minimum payments. They use a variety of methods to encourage their delinquent cardholders to pay their credit card balances, such as letters, phone calls and eventually the hiring of a collection agency. To justify the cost of using the collection agency, the agency must collect an average of at least $ 200 per customer. After a trial period during which the agency attempted to collect from a random sample of 100 delinquent cardholders, the 90% confidence interval on the mean collected amount was reported as ($ 190.25, $ 250.75). Given this, what recommendation(s) would you make to the credit card company about using the collection agency?
Relevant QuestionsA philanthropic organization sends out “free gifts” to people on their mailing list in the hope that the receiver will respond by sending back a donation. Typical gifts are mailing labels, greeting cards, or post cards. ...In a drawer are two coins. They look the same, but one coin produces heads 90% of the time when spun while the other one produces heads only 30% of the time. You select one of the coins. You are allowed to spin it once and ...Suppose that you are testing the hypotheses H0: p = 0.20 vs. HA: p ≠ 0.20. A sample of size 250 results in a sample proportion of 0.25. a) Construct a 95% confidence interval for p. b) Based on the confidence interval, ...An investor now tells you that if you leave your money in as long as 10 years, you will see an even greater return, so you would like to compare the 5-year and 10-year returns of a random sample of mutual funds to see if ...Exercises 71 and 73 give summaries and displays for car insurance premiums quoted by a local agent and an online company. Test an appropriate hypothesis to see if there is evidence that drivers might save money by switching ...
Post your question