# Test of hypothesis

A national car insurance company stated that in 1987, the average yearly car insurance cost for a family in the U.S. was $931. In the same year, a random sample of 39 families in california resulted in a mean cost of X = $975 with a standard deviation of = 30.50. Does this suggest that the average insurance cost for a family in california in 1987 exceeded the national average? Perform the hypothesis test at a significance level of 5%.

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#### Solution Preview

Null Hypothesis:Ho:M =931

Alternative Hypothesis:H1: M >= 931

Mean=M = 931

Standard deviation =s= 30.50

sample size=n= 39

sx=standard error of mean=s/square ...

#### Solution Summary

The solution tests the hypothesis that the average insurance cost for a family in california in 1987 exceeded the national average.

$2.49