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Hypothesis Testing: Mean cost of raising a child

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The US Department of Agriculture reports that the mean cost of raising a child from birth to age 2 in a rural area is $8,390. You believe that this value is incorrect, so you select a random sample of 900 children (age 2) and find that the mean cost is $8,275 with a standard deviation of $1,540. At α = 0.05, is there enough evidence to conclude that the mean cost is different from $8,390?

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Conclude the mean cost
The US Department of Agriculture reports that the mean cost of raising a child from birth to age 2 in a rural area is $8,390. You believe that this value is incorrect, so you select a random sample of 900 children (age 2) and find that the mean cost is $8,275 with a standard deviation of $1,540. At α = 0.05, is there ...

Solution Summary

The solution provides step by step method for the calculation of testing of hypothesis of mean cost of raising a child . Formula for the calculation and Interpretations of the results are also included. Interactive excel sheet is included. The user can edit the inputs and obtain the complete results for a new set of data.

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