. Determine the 95% confidence interval for the difference in the mean number of months to repay the loans between those companies run by individuals and those run by groups. between _____ and _______ months 2. Write a statement to interepret the confidence interval in question 1. 3. Based on your answers above, explain whether it can be determined that on average, the companies headed by individuals take longer to pay back their loans than those headed by groups.
A non-profit microfinance agency gives low-interest loans to people in developing countries to help them with their small businesses. The agency keeps track of the number of months it takes the small businesses to repay the loans; the distributions are normal, but for businesses headed by a single person, the standard deviation is 3 months whereas for businesses headed by a group of people, 2 months. The agency wants to determine if those businesses headed by a group of people pay off their loans faster than those businesses headed by individuals. In a sample of 50 of these business run by individuals, the average number of months to repay the loan was 42.3; in a sample of 50 businesses headed by a group, the average number of months was found to be 32.4.
tip: you can use margin of error, std error, Za/2 to solve this on excel.
1. Determine the 95% confidence interval for the difference in the mean number of months to repay the loans between those companies run by individuals and those run by groups.
between _____ and _______ months
2. Write a statement to interepret the confidence interval in question 1.
3. Based on your answers above, explain whether it can be determined that on average, the companies headed by individuals take longer to pay back their loans than those headed by groups.
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