Banking fees have received much attention during the recent economic recession a

Question

Banking fees have received much attention during the recent economic recession as banks look for ways to recover from the crisis. A sample of 32 customers paid an average fee of $12.31 per month on their interest-bearing checking accounts. Assume the population standard deviation is $1.56. Complete parts a and b below. a. Construct a 95% confidence interval to estimate the average fee for the population. The 95% confidence interval has a lower limit of $] and an upper limit of $). (Round to the nearest cent as needed.) b. What is the margin of error for this interval? $ (Round to the nearest cent as needed.)

Explanation / Answer

Mean is 12.31 and s is 1.56

for sample size of 32, the standard error SE is s/sqrt(N)=1.56/sqrt(32)=0.2758

z for 95% confidence is 1.96

margin of error ME is z*SE=1.96*0.2758=0.5406

thus lower bound for 95% confidence is mean-ME or 12.31-0.5406=11.7694

and upper bound is mean+ME or 12.31+0.5406=12.8506

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