A rent-to-own agreement allows the renter lo either return the merchandise after

Question

A rent-to-own agreement allows the renter lo either return the merchandise after a specified period of time or apply the monthly payments toward purchasing the item(s) (or clearly, the renter could default on the agreement) A rent-to-own company reports that nationally 61% of the agreements result in the merchandise being returned. 28% of the agreements result in the merchandise being purchased, and the remaining agreements are defaulted on (consumer does not make required payments specified in the contract). At a local rent-to-own company, a sample of 203 agreements finds that 108 result in the merchandise being returned. 74 agreement result in the merchandise being purchased and the remaining agreements are defaulted upon. When testing (at the 5% level of significance) whether the proportions of the local company are different than the proportions nationally, what is the test statistic (please round your answer to 3 decimal places)

Explanation / Answer

here applying chi square goodness of fit on above:

therefore test stat =7.283

donation range Probability O E=total*p =(O-E)^2/E being returned 0.610 108.000 123.83 2.02 being purchased 0.280 74.000 56.84 5.18 defaulted on 0.110 21.000 22.33 0.08 1 203 203 7.283

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