Answer:
We reject H₀ at 95 % of CI the group of Gen Xers who do not pay their credit card each month, is greater than this proportion for Millennians
Step-by-step explanation:
Sample proportion 1: Born between 1980 and 1996
sample size n₁ = 450
p₁ = 0,48 p₁ = 48 %
x₁ = 0,48 * 450 x₁ = 216
Sample proportion 2: Born between 1965 and 1971
sample size n₂ = 300
p₂ = 0,60 p₂ = 60%
x₂ = 0,6* 300 x₂ = 180
Test Hypothesis:
Null Hypothesis H₀ p₂ = p₁
Alternative Hypothesis H p₂ > p₁
Samples both big enough to use the normal distribution as an approximation to the binomial distribution.
We assume CI = 95 % then significance level α = 5 % the alternative hypothesis tells us that we need to develop a one-tail test to the right.
z-score is z(c) for α = 0,05 from z-table z(c) = 1,64
To calculate z(s)
z(s) = ( p₂ - p₁ ) / √ p*q ( 1 /n₁ + 1 / n₂)
p₂ - p₁ = 0,60 - 0,48
p₂ - p₁ = 0,12
p = ( x₁ + x₂ ) / n₁ + n₂
p = ( 216 + 300) / 450 + 300
p = 516 / 750 p = 0,688 then q = 1 - p q = 0,312
z(s) = 0,12 / √ 0,688*0,312* ( 1/450) + 1/ 300)
z(s) = 0,12 / √ 0,2146* ( 0,0022 + 0,0033)
z(s) = 0,12 / √ 0,001192
z(s) = 0,12/ 0,03452
z(s) = 3,47
Comparing |z(c)| and |z(s)|
z(s) > z(c)
Then z(s) is in the rejection region. We reject H₀.
We can support the claim that the proportion of the group Gen Xers who do not pay their credit card is greater than Millennians
