How much interest will $1,200 earn over 10 years with 5% interest compounded annually
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Answer:
A. T > 2.539
Step-by-step explanation:
We have a hypothesis test of the mean, with unknown population standard deviation.
The hypothesis are:
From the hypothesis we can see that the test is right-tailed, so the critical value of t should be a positive value.
The degrees of freedom can be calculated as:
The significance level is 0.01, so the critical value tc should be the one that satisfies:
Looking up in a t-table, for 19 degrees of freedom, this critical value is tc=2.539.
