12. -14 points MendStat14 8E.017 My Notes Ask Your Teacher 6 An increase in the

Question

12. -14 points MendStat14 8E.017 My Notes Ask Your Teacher 6 An increase in the rate of consumer savings is frequently tied to a lack of confidence in the economy and is said to be an indicator of a recessional tendency in the economy. A random sampling of 240 savings accounts in a local community showed a mean increase in savings account values o 7.3% over the past 12 months, with a standard deviation of 5.596. Estimate the mean percent increase in savings account values over the past 12 months for depositors in the community Find the 95% margin of error for your estimate. (Round your answer to three decimal places.)

Explanation / Answer

Given :--

n = 240, mu= 7.3% , sigma =5.5%

Zc = 95% confidence level with alpha= 0.05 then critical value is 1.96

Therefore the mean percent increase in savings account value over the past 12 months for depositors in the community is

mux = mu = 7.3%

And margin of error (ME) is

ME = Zc * sigma/n

ME = 1.96 * (0.055/240)

ME = 1.96 *0.00356

ME = 0.0069776

ME= 0.007%. ........ when round up answer.

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