In Order to Estimate the Difference Between the Average Miles

question 121

Short Answer

In order to estimate the difference between the average Miles per Gallon of two different models of automobiles, samples are taken and the following information is collected.
$$\begin{array} { l c r } & \text { Modal A } & \text { Modal B} \\\text { Sample Size } & 60 & 55 \\\text { Sample Mean } & 28 & 25 \\\text { Smple Variance } & 16 & 9\end{array}$$
a. At 95% confidence develop an interval estimate for the difference between the average Miles per Gallon for the two models.
b. Is there conclusive evidence to indicate that one model gets a higher MPG than the other? Why or why not? Explain.

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Definitions:

Economic value

The worth of a good or service as determined by the market and the price a buyer is willing to pay.

Compounded quarterly

Interest calculation method where the interest is added to the principal every three months, affecting the overall amount on which future interest is calculated.

Perpetuity

An annuity in which payments continue indefinitely, typically at a fixed rate.

Compounded semi-annually

Accumulation method for interest where the interest is applied to the principal twice a year, thereby influencing the total amount of interest earned or paid.