An Associated Press article written by Eileen Powell titled “Credit Card Payments Going Up” described a recent change in credit card policies. Under pressure from federal regulators, credit card issuers have started to raise the minimum payment that consumers are required to pay on outstanding credit card balances. Suppose a claim is made that more than 40% of all credit card holders pay the minimum payment. To test this claim, a random sample of payments made by credit card customers was collected. The sample contained data for 400 customers, of which 174 paid the minimum payment.
a. State the appropriate null and alternative hypotheses.
b. Based on the sample data, test the null hypothesis using an alpha level equal to 0.05. Discuss the results of the test.