You deposit $975.52 in a bank account. Find the balance after 4 years if the account pays 7.25% annual interest compounded quart
1 answer:
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Answer:
a. Z = -1.175.
b. Z = 1.34.
c. |Z| = 2.054.
d. |Z| = 1.28.
Step-by-step explanation:
Z-score:
In a set with mean and standard deviation
, the z-score of a measure X is given by:
The Z-score measures how many standard deviations the measure is from the mean. After finding the Z-score, we look at the z-score table and find the p-value associated with this z-score. This p-value is the probability that the value of the measure is smaller than X, that is, the percentile of X. Subtracting 1 by the p-value, we get the probability that the value of the measure is greater than X.
a. The critical z-score for a left-tailed test at a 12% significance level
Left-tailed test: The region of interest is the 12th percentile or below.
Thus, the critical z-score is Z with a p-value of 0.12, so Z = -1.175.
b. The critical z-score for a right-tailed test at a 9% significance level
Right-tailed test: The region of interest is the 100 - 9 = 91th percentile and above.
Thus, the critical z-score is Z with a p-value of 0.91, so Z = 1.34.
c. The critical z-score for a two-sided test at a 4% significance level is 1.75.
Two-tailed test: The region of interest is between the 4/2 = 2th percentile and the 100 - (4/2) = 98th percentile.
Thus, the critical z-score is |Z| with a p-value of 0.02 or 0.98, so |Z| = 2.054.
d. The critical z-score for a two-sided test at a 20% significance level is 0.85.
Region of interest is between the 20/2 = 10th percentile and the 100 - (20/2) = 90th percentile.
Thus, the critical z-score is |Z| with a p-value of 0.1 or 0.9, so |Z| = 1.28.