According to data from the Board of Governors of the Federal Reserve System, student loan debt reach $1.5 trillion in the first quarter of 2018. However, you also know from the research of economist Susan Dynarski from the University of Michigan that the majority of students actually do not borrow any money for college and only about 2% of students have more than $50,000 of student loan debt. Of course, you are curious to find out what the situation is among your peers at your school. Your school claims that the average student graduates with debt of $1,596. To validate this claim, you create a random sample of 20 students during graduation and ask each student to anonymously report the amount of their student loan debt. The data are as follows and can also be found in the Excel file titled student loan debt.xlsx.

a. Construct a 95% confidence interval with these data to estimate the average student loan debt of students graduating at your school.

b. Do these results validate the claim of your school?

c. What is the margin of error for this sample?

Transcribed Image Text:

$0 $0 $0 $0 $0 $1,800 $2,000 $2,000 $100 $2,800 $1,100 $1,900 $2,800 $2,750 $2,350 $2,300 $250 $3,000