A financial services company wants to estimate the amount of credit card debt that students typically have when they graduate from college by generating a 98% confidence interval for the mean credit card debt of all students. Assume that, based on data from a previous study conducted two years ago, the standard deviation of student credit card debt is approximately $680. a) The company is considering using a sample size of 75 students to develop its estimate. What would be the (approximate) margin of error be for the 98% confidence interval based on a random sample of 75 students?
A financial services company wants to estimate the amount of credit card debt that students typically have when they graduate from college by generating a 98% confidence interval for the mean credit card debt of all students. Assume that, based on data from a previous study conducted two years ago, the standard deviation of student credit card debt is approximately $680. a) The company is considering using a sample size of 75 students to develop its estimate. What would be the (approximate) margin of error be for the 98% confidence interval based on a random sample of 75 students?
Glencoe Algebra 1, Student Edition, 9780079039897, 0079039898, 2018
18th Edition
ISBN:9780079039897
Author:Carter
Publisher:Carter
Chapter10: Statistics
Section10.4: Distributions Of Data
Problem 19PFA
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Transcribed Image Text:A financial services company wants to estimate the amount of credit card debt that
students typically have when they graduate from college by generating a 98% confidence interval
for the mean credit card debt of all students. Assume that, based on data from a previous study
conducted two years ago, the standard deviation of student credit card debt is approximately $680.
a) The company is considering using a sample size of 75 students to develop its estimate. What
would be the (approximate) margin of error be for the 98% confidence interval based on a
random sample of 75 students?
b) The company would like a margin of error of no more than $125 for its estimate. How large a
sample size is needed to generate a 98% confidence interval with a margin of error of $125?
Transcribed Image Text:c) Based on the study's budget, the company decides to select a random sample of 120 recent
college graduates and asks each of them to indicate the amount of credit card debt they had at
the time of graduation. The average credit card debt per student in the sample was $2,620, with a
standard deviation of $710. Using this data, calculate a 98% confidence interval for the mean
credit card debt of recent college graduates. Conduct a complete analysis and interpret your
interval estimate in context of the study.
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