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MissTica
3 years ago
9

A teacher figures that final grades in the chemistry department are distributed as: A, 25%; B, 25%;C, 40%;D, 5%; F, 5%. At the e

nd of a randomly selected semester, the following number of grades were recorded. Calculate the chi-square test statistic x^2 to determine if the grade distribution for the department is different than expected. Use α = 0.01.
Grade A B C D F
Number 36 42 60 14 8

a. 6.87
b. 0.6375
c. 5.25
d. 4.82
Mathematics
1 answer:
gladu [14]3 years ago
6 0

Answer:

E_{A} =0.25*160=40  

E_{B} =0.25*160=40

E_{C} =0.4*160=64

E_{D} =0.05*160=8  

E_{F} =0.05*160=8  

And now we can calculate the statistic:  

\chi^2 = \frac{(36-40)^2}{40}+\frac{(42-40)^2}{40}+\frac{(60-64)^2}{64}+\frac{(14-8)^2}{8}+\frac{(8-8)^2}{8} =5.25  

The answer would be:

c. 5.25

Step-by-step explanation:

The observed values are given by:

A: 36

B: 42

C: 60

D: 14

E: 8

Total =160

We need to conduct a chi square test in order to check the following hypothesis:  

H0: There is no difference in the proportions for the final grades

H1: There is a difference in the proportions for the final grades

The level of significance assumed for this case is \alpha=0.01  

The statistic to check the hypothesis is given by:  

\chi^2 =\sum_{i=1}^n \frac{(O_i -E_i)^2}{E_i}  

Now we just need to calculate the expected values with the following formula E_i = \% * total  

And the calculations are given by:  

E_{A} =0.25*160=40  

E_{B} =0.25*160=40

E_{C} =0.4*160=64

E_{D} =0.05*160=8  

E_{F} =0.05*160=8  

And now we can calculate the statistic:  

\chi^2 = \frac{(36-40)^2}{40}+\frac{(42-40)^2}{40}+\frac{(60-64)^2}{64}+\frac{(14-8)^2}{8}+\frac{(8-8)^2}{8} =5.25  

The answer would be:

c. 5.25

Now we can calculate the degrees of freedom for the statistic given by:  

df=(categories-1)=(5-1)=4

And we can calculate the p value given by:  

p_v = P(\chi^2_{4} >5.25)=0.263  

The p value is higher than the significance so we have enough evidence to FAIL to reject the null hypothesis

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Part B: The value of the compounded quarterly interest investment at the end of three years is $12,134.08

Part C: The simple interest investment is better over the first three years

Part D: I advise George to invest his money in the compounded interest investment if he will keep the money for a long time

Step-by-step explanation:

Part A:

A = P + P r t, where

  • A represents the value of the investment
  • P represents the original amount
  • r represents the  rate in decimal
  • t represents the time in years

∵ George deposits $10,000

∴ P = 10,000

∵ First option offers 7.4% per year simple interest

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∵ He may not withdraw any of  the money for three years after

   the initial deposit

∴ t = 3

- Substitute all of these values in the formula above

∴ A = 10,000 + 10,000(0.074)(3)

∴ A = 10,000 + 2,220

∴ A = 12,220

The value of the simple interest investment at the end of three years is $12,220

Part B:

A=P(1+\frac{r}{n})^{nt}, where

  • A represents the value of the investment
  • P represents the original amount
  • r represents the  rate in decimal
  • n is a number of periods of a year
  • t represents the time in years

∵ George deposits $10,000

∴ P = 10,000

∵ The second option offers a 6.5% interest rate compounded quarterly

∴ r = 6.5% = 6.5 ÷ 100 = 0.065

∴ n = 4 ⇒ quarterly

∵ He may not withdraw any of  the money for three years after

   the initial deposit

∴ t = 3

- Substitute all of these values in the formula above

∴ A=10,000(1+\frac{0.065}{4})^{(4)(3)}

∴ A=10,000(1.01625)^{12}

∴ A = 12,134.08

The value of the compounded quarterly interest investment at the end of three years is $12,134.08

Part C:

∵ 12,220 > 12,134.08

∴ The simplest interest investment is better than the compounded

    interest investment at the end of three years

The simple interest investment is better over the first three years

Part D:

I advise George to invest his money in the compounded interest investment if he will keep the money for a long time

Look to the attached graph below

  • The red line represents the simple interest investment
  • The blue curve represents the compounded interest investment
  • (Each 1 unit in the vertical axis represents $1000)
  • After 0 years and before 4.179 years the red line is over the blue curve, that means the simple interest is better because it gives more money than the compounded interest
  • After that the blue curve is over the red line that means the compounded quarterly is better because it gives more money than the simple interest

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