Question

A bank has historically found that the average monthly charges in recent years on its credit card were $1,350. With an improving economy, they suspect that this has increased. A sample of 42 customers resulted in an average monthly charge of $1,376.54 with a standard deviation of $183.89. a. Formulate hypotheses that can be used to determine whether the average monthly charge has increased. Group of answer choices

Answer 1

Answer:

$\mu=1350$

$\mu>1350$

Step-by-step explanation:

Let $\mu$ be the population mean for the monthly charges on credit card.

Given : A bank has historically found that the average monthly charges in recent years on its credit card were $1,350.

Since a null hypothesis shows that no statistical significance exists in two groups tested whereas alternative hypothesis is opposite of it.

Hypotheses that can be used to determine whether the average monthly charge has increased are :

Null hypothesis : $\mu=1350$

Alternative hypothesis : $\mu>1350$