Consumer Reports (January 2005) indicates that profit margins on extended warran

Question

Consumer Reports (January 2005) indicates that profit margins on extended warranties are much greater than on the purchase of most products. In this exercise we consider a major electronics retailer that wishes to increase the proportion of customers who buy extended warranties on digital cameras. Historically, 20 percent of digital camera customers have purchased the retailer’s extended warranty. To increase this percentage, the retailer has decided to offer a new warranty that is less expensive and more comprehensive. Suppose that three months after starting to offer the new warranty, a random sample of 479 customer sales invoices shows that 164 out of 479 digital camera customers purchased the new warranty. Find a 95 percent confidence interval for the proportion of all digital camera customers who have purchased the new warranty. Are we 95 percent confident that this proportion exceeds .20? (Round your answers to 3 decimal places.)

Explanation / Answer

Using Minitab:

Test and CI for One Proportion

Sample X N Sample p 95% CI
1 164 479 0.342380 (0.299930, 0.386790)

Yes. the entire interval is above 0.20.

Hope this will helpful . thanks and god bless you:)

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.