A sample of 64 account balances of a credit company showed an average balance of $1,125 with a standard deviation of $126.
State your “givens” from the prompt.
What kind of test will you use, and why?
Is this one-tail, or two tailed, and how do you know?
Formulate the hypotheses that can be used to determine whether the mean of all account balances is significantly different from $1,200.
Compute the test statistic. Show your formula and what numbers were plugged in.
Using the p-value approach, what is your conclusion? Let α = .05.