A Random Sample of 250 Students at a University Finds

question 39

Multiple Choice

A random sample of 250 students at a university finds that these students take a mean of 14.3 credit hours per quarter with a standard deviation of 1.7 credit hours. The 95% confidence interval for the mean is 14.3 ± 0.211. Interpret the interval.

• A) The probability that a student takes 14.089 to 14.511 credit hours in a quarter is 0.95.
• B) 95% of the students take between 14.089 to 14.511 credit hours per quarter.
• C) We are 95% confident that the average number of credit hours per quarter of the sampled students falls in the interval 14.089 to 14.511 hours.
• D) We are 95% confident that the average number of credit hours per quarter of students at the university falls in the interval 14.089 to 14.511 hours.

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Definitions:

Amortization Assumption

The accounting practice of gradually writing off the initial cost of an intangible asset over its useful life.

Interest Expense

The cost incurred by an entity for borrowed funds; interest payments made on any form of debt over a given period.

Effective Interest Method

An accounting practice used to allocate loan discounts or premiums over the life of the loan, reflecting the financial interest rate more accurately.

Discount Amortization

The process of gradually reducing the discount on bonds payable or notes payable over the life of the debt.