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    Chi Squared Test for Card Holders Paying Charges

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    The bank credit card department of Carolina Bank knows from experience that 5 percent of the card holders have had some high school, 15 percent have completed high school, 25 percent have had some college, and 55 percent have completed college. Of the 500 card holders whose cards have been called in for failure to pay their charges this month, 50 had some high school, 100 had completed high school, 190 had some college, and 160 had completed college.

    Can we conclude that the distribution of card holders who do not pay their charges is different from all others?

    Use the .01 significance level.

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    Solution Summary

    Solution attaches a .doc file to show how to perform the hypothesis test that will decide if the distribution of card-holders who do not pay their charges is different from the others at the 0.01 significance level.