Question

4.751 4.373 4.177 4.676 (a) Construct a confidence interval for the mean rate. Round the answer to at least four decimal places. A confidence interval for the mean rate is

Answer 1

98% confidence interval for the mean rate = [4.1437 , 4.4983]

We are given the interest rates (annual percentage rates) for a 30-year fixed rate mortgage from a sample of lenders in Macon, Georgia for one day ;

4.751, 4.373, 4.177, 4.676, 4.425, 4.228, 4.125, 4.251, 3.951, 4.192, 4.291, 4.414

Now, Firstly we will find the Mean of the above data, Xbar ;

Mean, Xbar = ∑ x ÷ n =

4.751 + 4.373 + 4.177 + 4.676 + 4.425 + 4.228 + 4.125 + 4.251 + 3.951 + 4.192 + 4.291 + 4.414 ÷ 12 = 4.321

Standard deviation, s = √ ∑(x - x bar)²÷ n-1 = 0.226.

Now, the pivotal quantity for the 98% confidence interval for the mean rate is;

P.Q = x bar - ц ÷ n - 1 ≈ tn - 1

where, Xbar = sample mean

s = sample standard deviation

n = sample size = 12

So, 98% confidence interval for the mean rate, μ is ;

P(-2.718 < t₁₁ <2.718) = 0.98

P(-2.718 <Xbar - μ σ√ⁿ < 2.718) = 0.98

P(Xbar - 2.718 * ₈÷ √ⁿ < μ Xbar +  2.718 * ₈÷ √ⁿ ) = 0.98

98% confidence interval for μ = (Xbar - 2.718 * ₈÷ √ⁿ < μ Xbar +  2.718 * ₈÷ √ⁿ ) = 0.98

[4.321 - 2.718 * 0.226 ÷ √₁₂ , 4.321 + 2.718 * 0.226 ÷ √₁₂

                                  = [4.1437 , 4.4983]

Therefore, 98% confidence interval for the mean rate = [4.1437 , 4.4983]

Learn more about standard deviation at

brainly.com/question/475676

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