Betty Borrower has a short term one year note at 14% interest per year. What is the APR?
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Answer:
The critical value that should be used is T = 2.0796.
The 95% confidence interval for the mean repair cost for the dryers is between $91.912 and $105.648.
Step-by-step explanation:
We have the standard deviation for the sample, which means that the t-distribution is used to solve this question.
The first step to solve this problem is finding how many degrees of freedom, we have. This is the sample size subtracted by 1. So
df = 22 - 1 = 21
95% confidence interval
Now, we have to find a value of T, which is found looking at the t table, with 21 degrees of freedom(y-axis) and a confidence level of . So we have T = 2.0796, which is the critical value that should be used.
The margin of error is:
In which s is the standard deviation of the sample and n is the size of the sample.
The lower end of the interval is the sample mean subtracted by M. So it is 98.78 - 6.868 = $91.912
The upper end of the interval is the sample mean added to M. So it is 98.78 + 6.868 = $105.648
The 95% confidence interval for the mean repair cost for the dryers is between $91.912 and $105.648.