Warren County Telephone Company claims in its annual report that “the typical cu

Question

Warren County Telephone Company claims in its annual report that “the typical customer spends $62 per month on local and long-distance service.” A sample of 12 subscribers revealed the following amounts spent last month.

  $65

$65

$64

$68

$58

$64

$69

$62

$64

$56

$54

$69

What is the point estimate of the population mean? (Round your answer to 3 decimal places.)

Develop a 98% confidence interval for the population mean. (Use t Distribution Table.) (Round your answers to 3 decimal places.)

Warren County Telephone Company claims in its annual report that “the typical customer spends $62 per month on local and long-distance service.” A sample of 12 subscribers revealed the following amounts spent last month.

Explanation / Answer

a)     x     =     sum(65,65,64,68,58,64,69,62,64,56,54,69)/12

              =758/12

              = 63.166666666667   = 63.167

and standard devaition 4.8958857186108

b)    a=0.02, |t(0.01, df=n-1=11)|=2.72 (from student t table)

    we know that

98% CI is     xbar ±t*s/n

     63.166666666667 ±   2.72 * 4.8958857186108 ./ sqrt(12)

                  63.166666666667       ±      3.844

                         59.323 ,67.011

C)Since this interval includes 62, the company's claim that the "typical customer" spends $62 per month is reasonable

YES

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