8.2.9-T EQuestion Help Banking fees have received much attention during the rece

Question

8.2.9-T EQuestion Help Banking fees have received much attention during the recent economic recession as banks look for ways to recover from the crisis. A sample of 42 customers paid an average fee of $12.25 per month on their interest-bearing checking accounts. Assume the population standard deviation is $1.73. Complete parts a and b below. a. Construct a 90% confidence interval to estimate the average fee for the population. The 90% confidence interval has a lower limit of $1 1 and an upper limit of $ (Round to the nearest cent as needed.)

Explanation / Answer

Mean is 12.25 and s is 1.73. for N=42, the standard error is SE=1.73/sqrt(42)=0.267

for 90% z value is 1.645

thus lower limit is mean-s*z=12.25-0.267*1.645=11.81

upper limit is mean+s*z=12.25+0.267*1.645=12.69

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