Purchase Solution

Significance Level for Interest Rates

Not what you're looking for?

Ask Custom Question

In recent years, the interest rate on home mortgages has declined to less than 6.0 percent. However, according to a study by the Federal Reserve Board, the rate charges on credit card debt is more than 14 percent. Listed below is the interest rate charged on a sample of 10 credit cards.

14.6 16.7 17.4 17.0 17.8 15.4 13.1 15.8 14.3 14.5

Is it reasonable to conclude the mean rate charged is greater than 14 percent? Use the 0.01 significance level.

Purchase this Solution

Solution Summary

The solution examines significance levels for interest rates. The expert determines if it is reasonable to conclude the mean rate charged is greater than 14 percent.

Solution Preview

Our null hypothesis is that the true mean is less than or equal to 14 percent. The alternative hypothesis is that the true mean is greater than 14 percent.
We want to run a t-test, because the sample size is less than 30. In order to do so, we need to calculate the test statistic .
is the sample mean, so ...

Purchase this Solution


Free BrainMass Quizzes
Measures of Central Tendency

This quiz evaluates the students understanding of the measures of central tendency seen in statistics. This quiz is specifically designed to incorporate the measures of central tendency as they relate to psychological research.

Know Your Statistical Concepts

Each question is a choice-summary multiple choice question that presents you with a statistical concept and then 4 numbered statements. You must decide which (if any) of the numbered statements is/are true as they relate to the statistical concept.

Measures of Central Tendency

Tests knowledge of the three main measures of central tendency, including some simple calculation questions.

Terms and Definitions for Statistics

This quiz covers basic terms and definitions of statistics.