Question: According to Bankrate.com, a navigation system is an expensive option that does not enhance the resale value of an automobile (Bankrate.com website, February 11, 2013).

According to Bankrate.com, a navigation system is an expensive option that does not enhance the resale value of an automobile (Bankrate.com website, February 11, 2013). Use the data in the file Corolla Navigation, which contains recent resale prices for 40, 2009 Corolla XRS sedans that have navigation systems and 50 2009 Corolla XRS sedans that do not have navigation systems, to evaluate this claim.

a. Provide a point estimate of the difference between the population mean prices for 2009 Corolla XRS sedans that have navigation systems and 2009 Corolla XRS sedans that do not have navigation systems.

b. Historical data indicate that a population standard deviation of $2,000 is reasonable for 2009 Corolla XRS sedans that have navigation systems and for 2009 Corolla XRS sedans that do not have navigation systems. Compute the margin of error for your estimate in part (a). Use 95% confidence.

c. Develop a 95% confidence interval estimate of the difference between the resale prices of 2009 Corolla XRS sedans that have navigation systems and 2009 Corolla XRS sedans that do not have navigation systems.

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