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posted by  Iavn on 11/4/2009 2:00:08 PM  |  status: Closed  |  Earned Karma: 0

statistics

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Statistics and Probability N/A N/A N/A 11/4/2009 at 11:00:00 PM
Question Details:
A large regional  bank seeks  to locate  branch offices in residential communities. The objective  is to focus  on home  improvement  loan, so a  community's  homes must have  a n average  age over 15 years. I randomly select  130 city  property  records for Clarksdale and find  the mean age of  homes  to be 15.78 years  with a standard deviation  of 3.1 years. Is Clarksdale a good candidate for a branch  office?
 please help me I am so confused

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posted by Jonpp on 11/4/2009 3:33:29 PM  |  status: Live
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Response Details:
n=130, X_bar=15.78, S=3.1, μ=15
Let α=0.05, Z(0.025)=1.96 (check normal table)

The test hypothesis is
Ho:μ<=15
Ha:μ>15

the test statistics is Z=(X-bar - μ)/ (S/√n) = (15.78 - 15)/ (3.1/√130) = 2.87
Since Z=2.87>1.96, reject Ho. Thus, clarksdale is a good candidate for a branch office.
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