Private Colleges and Universities Rely on Money Contributed by Individuals $\bar { X } = 180.975$

question 16

Multiple Choice

Private colleges and universities rely on money contributed by individuals and corporations for their operating expenses.Much of this money is put into a fund called an endowment, and the college spends only the interest earned by the fund.A recent survey of 8 private colleges in the United States revealed the following endowments (in millions of dollars) : 60.2, 47.0, 235.1, 490.0, 122.6, 177.5,95.4, and 220.0.Summary statistics yield $\bar { X } = 180.975$ and S =143.042 .Calculate a 95% confidence interval for the mean endowment of all the private colleges in the United States assuming a normal distribution for the endowments.

• A)$180.975 \(\pm\) $94.066
• B)$180.975 \(\pm\) $99.123
• C)$180.975 \(\pm\) $116.621
• D)$180.975 \(\pm\) $119.586

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Definitions:

Short-term Note Payable

A debt obligation payable within a short period, typically one year or less, representing borrowed funds that need to be repaid.

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Times Interest Earned

A financial ratio that measures the ability of a business to meet its interest payments based on current earnings.

Interest Expense

The cost incurred by a company for borrowed funds, including loans, bonds, and lines of credit.