Your local newspaper contains a large number of advertisements for unfurnished one-bedroom apartments in a particular neighborhood. you choose 36 at random and calculate that their mean monthly rent is $530 with a standard deviation of $78. you want to find out if the sample data gives a good reason to believe that the average rent for all advertised one-bedroom apartments is less than $550 per month. conduct the following hypothesis test at 0.01 level of significance.
μ < 550
Let us take,
Null Hypothesis(H₀) : μ = 550
Alternative Hypothesis(H₁) : μ < 550
Now, The Z-statistic for mean is given by,
Here, n = 36, μ = 550, = 530, s = 78
Z = (530 - 550) ÷ √(78 / 36)
Z = -20 ÷ 1.47196
Z = -13.58732
Thus, Z-value = -13.587 with 35 degree of freedom.
and α = 0.01
The value of p is < .00001.
Since, the value of p is less than α.
The result is significant at p < .01.
Thus, we reject the null-hypothesis.
Hence, μ < 550
1. practice, practice & more practice
2. review errors
3. master the key concepts
do not try to memorise the processes.
4. understand your doubts.
5. create a distraction free study environment
6. create a mathematical dictionary
7. apply maths to real world problems.