How much interest certificates of deposit (CDs) pay varies by financial institution and also by length of the investment? A large sample of national one-year CD offerings in 2009 showed an average interest rate of 1.84 and a standard deviation σ = 0.262. A five-year CD ties up an investor’s money, so it usually pays a higher rate of interest. However, higher rates might cause more variability. The table lists the five-year CD rate offerings from n = 10 banks in the northeast United States. Find a 95% confidence interval for the standard deviation of 5-year CD rates. Do these data suggest that interest rates for five-year CDs are more variable than those for one-year certificates?

Bank                                                   Interest Rate (%)

Domestic Bank……………...............…………….      2.21

Stonebridge Bank……….............……………….      2.47

Waterfield Bank…………….…............………...      2.81

NOVA Bank………………................…………….      2.81

American Bank…………….……............……….      2.96

Metropolitan National Bank…….….....…….      3.00

AIG Bank……………….................……………….      3.35

iGObanking.com…………...........……………..       3.44

Discover Bank……………….............…………..      3.44

Intervest National Bank…….......…………...       3.49