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Hypothesis Testing of Mean: Annual auto insurance

SEE ATTACHED FILE - p-Value - Automobile Insurance

(10.57)

According to the Insurance Information Institute, the mean annual expenditure
for automobile insurance for U. S. motorists is $706. Suppose that a government
official in North Carolina has surveyed a saimple random sample of 80 residents of
her state, and that their auto insurance expenditures for the most recent year are
in data file XR10057. Based on these data, examine whether the mean annual
auto insurance expenditure for motorists in North Carolina might be different from
the $706 for the country as a whole. Identify and interpret the p-value for the test.
Using the 0.05 level of significance, what conclusion do you reach?

NOTE: Please use an Excel spreadsheet for response. Please do not just provide
the answers but show in complete detail how you arrived at the answers, step-by-step, from the beginning to the end of the solution.

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Solution Summary

The solution provides step by step method for the calculation of testing of hypothesis. 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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