Assignment #3 BAB210

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1. (Solve manually) A department store has determined that 25% of all their sales are credit
sales. A random sample of 75 sales is selected. (10 marks)
Basics
1) P0 = 0.25(25%) 2) 1- P0 = 0.75 3) n = 75 4) ^
P = √((0.25*75)/75) = 0.25
a.What are the expected value, standard deviation, and shape of the sampling
distribution of the p-bar?
Expected Value of p-bar = Population proportions
Expected Value of p-bar = 0.25
The expected value of p-bar is 0.25
Standard deviation of p-bar (infinite population) = √(p(1 – p)/n)
σp-bar =√ ((0.25*0.75)/75) = √0.0025
σp-bar = 0.05
The Standard deviation of p-bar is 0.05

n*p = (75*0.25) = 18.75>=5 and n*(1 - p) = 75*(1 - 0.25) = 56.25>=5

Therefor since n*p and n*(1-p) are both greater or equal than 5 we can
approximate the shape of the sampling as a normal distribution
b. What is the probability that the sample proportion will be greater than 0.34?
Get z-score
z = (Phat – P0)/σp-bar
z = (0.34 – 0.25)/0.05
z = 1.8
P (z < 1.8) = 0.9641 //consult z-score table

P (Phat > 0.34) = 1 - P (z < 1.8) = 1 - 0.9641

P (Phat > 0.34) = 0.0359
Therefor the probability that the sample proportion will be greater than 0.34 is
0.0359 or 3.55%
c. What is the probability that the sample proportion will be between 0.196 and
0.354?
Calculate Z scores of 0.196 and 0.354
Z1 = (0.196 – 0.25)/0.05 = -0.054/0.05
Z1 = -1.08

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 Z2 = (0.354 – 0.25)/0.05 = 0.104/0.05
Z2 = 2.08
consult z-score table
P (0.196 < Phat < 0.354) = P (-1.08 < Z < 2.08) = P (Z < 2.08) – P (Z < -1.8)
P (0.196 < Phat < 0.354) = 0.9812 – 0.1401 = 0.8411
Therefor the probability that the sample proportion will be between 0.196
and 0.354 is 0.8411 or 84.11%
d.What is the probability that the sample proportion will be less than 0.25

Calculate Z scores for 0.25

z = (0.25 – 0.25)/0.05 = 0/0.05
z=0
consult z score table
P (Phat < 0.25) = P(z < 0)
P (Phat < 0.25) = 1 - 0.500 - 1
P (Phat < 0.25) = 0.500
Therefor the probability that the sample proportion will be less than 0.25
is 0.500 or 50%
e.What is the probability that the sample proportion will be less than 0.10?
Calculate Z scores for 0.10
z = (0.10 – 0.25)/0.05 = -3
z = -3
consult z score table
P (Phat < 0.10) = P (z < -3)
P (Phat < 0.10) = 0.0013
Therefor the probability that the sample proportion will be less than 0.10 is 0.0013
or 0.13%
2. (Solve manually) A bank has kept records of the checking balances of its customers and
determined that the average daily balance of its customers is $300 with a standard
deviation of $48. A random sample of 144 checking accounts is selected. (8 marks)
Basics:  = 300  = 48 n = 144
a. What is the probability that the sample mean will be more than $306.60?
Calculate z-scores
z = (x̄ – ) / (/√n)
z = (306.60 – 300) / (48/√144)
z = 1.65
consult z score table
P (x̄ > 306.6) = 1 – P (Z < 1.65)
P (x̄ > 306.6) = 1 – 0.9505
P (x̄ > 306.6) = 0.0495
Therefor the probability that the sample mean will be more than $306.6 is 0.0495
or 4.95%.

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 b. What is the probability that the sample mean will be less than $308?
Calculate z-scores
z = (x̄ – )/ √n
z = (308– 300)/ (48/√144)
z = 2.00
consult z score table
P (x̄ > 306.6) = P (Z < 2.00)
P (x̄ > 306.6) = 0.9772
Therefor the probability that the sample mean will be less than $308 is 0.9772 or
97.72%
c. What is the probability that the sample mean will be between $302 and $308?
Calculate both z-scores
z1 = (x̄ – ) / (/√n) z2 = (x̄ – ) / (/√n)
z1 = (302– 300) / (48/√144) z2 = (308– 300) / (48/√144)
z1 = 0.50 z2 = 2.00
consult z score table
P (302< x̄ <308) = P (0.50< Z < 2.00) = P (Z < 2.00) - P(Z<0.50)
P (302< x̄ <308) = 0.9772 - 0.6915
P (302< x̄ <308) = 0.2857
Therefore, the probability that the sample mean will be between $302 and $308 is
0.2857 or 28.57%.
d. What is the probability that the sample mean will be at least $296?
Calculate both z-scores
z = (x̄ – )/ (/√n)
z = (296– 300)/ (48/√144)
z = 1.00
consult z score table
P (x̄ > 296) = 1- P (Z < 1.00)
P (x̄ > 296) = 1 – 0.1587
P (x̄ > 296) = 0.8413
Therefore, the probability that the sample mean will be at least $296 is 0.8413 or
84.13%
3. (Solve using Excel) A random sample of 10 examination papers in a course, which
was given on a pass or fail basis, showed the following scores. (4 marks)
Paper Grade Status
Number
1 65 Pass
2 87 Pass
3 92 Pass
4 35 Fail

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 5 79 Pass
6 100 Pass
7 48 Fail
8 74 Pass
9 79 Pass
10 91 Pass
a. The point estimate for the mean of the population is
a. 750
b. 100
c. 85
d. 75
b. The point estimate for the standard deviation of the population is
a. 419.43
b. 20.48
c. 75
d. 750
c. The point estimate for the variance of the population is
a. 419.43
b. 20.48
c. 75
d. 750
d. The point estimate for the proportion of all students who passed the course is
a. 0.8
b. 0.2
c. 1.8
d. 1.2
4. (Solve manually) A local health center noted that in a sample of 400 patients 80 were
referred to them by the local hospital. (6 marks)

Basics: X = 80 n = 400 Phat = 80/400 = 0.2

a.Provide a 95% confidence interval for all the patients who are referred to the
health center by the hospital.
Phat ± Za/2 * √ ((Phat (1- Phat))/n)
= 0.20 ± Z0.05/2 √0.20 (1-0.20) / 400)
= 0.20 ± 1.96 * √0.0004 consult z score table
= 0.20 ± 0.0392 (0.1608, 0.2392)
b.What size sample would be required to estimate the proportion of hospital
referrals with a margin of error of 0.04 or less at 95% confidence?
n = (Zan/E)2 * Phat (1 - Phat)
n = (Z(0.05/2)/0.04)2 * 0.20(1 - 0.20)
n = (1.96/0.04)2 * (0.16) consult z score table
n = 2401*(0.16) = 384.16

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 Therefore, the appropriate sample size would be 384
A 55. (Solve manually) The Bureau of Labor Statistics reported that the average
yearly income of dentists in the year 2012 was $110,000. A sample of 81
dentists, which was taken in 2013, showed an average yearly income of
$120,000. Assume the standard deviation of the population of dentists’
incomes in 2013 is $36,000. (7 marks)
BaBasics:  = 110,000 n = 81 x̄ =120,000 σ=36,00
a. We want to test to determine if there has been a significant increase in the
average yearly income of dentists. Provide the null and the alternative
hypotheses. (2 marks)
H0 =  ¿ $110,000
Ha =  > $110,000
b. Compute the test statistic. (2 marks)

z = (x̄ - ) / (σ /√n)
z = 120,000 – 110,000) / (36,000 / √81)
z = 10,000 / 4000
z = 2.5

c. Test the hypotheses at 95% confidence. (3 marks)

x̄ ± Za * (σ /√n)
= 120,000 ± Z0.05 * (36,000 / √81)
= 120,000 ± Z0.05 * (36,000 / 9)
= 120,000 ± 1.645 * (4000)
= 120,000 ± 6580
= (113420, 126580)

Since the hypotheses value ($110,000) does not fall within the confidence interval we
can reject H0

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