The Manager of University Credit Union (UCU) Is Concerned About

question 14

Short Answer

The manager of University Credit Union (UCU) is concerned about checking account transaction discrepancies. Customers are bringing transaction errors to the attention of the bank's staff several months after they occur. The manager would like to know what proportion of his customers balance their checking accounts within 30 days of receiving a transaction statement from the bank.Using random sampling, 400 checking account customers are contacted by telephone and asked if they routinely balance their accounts within 30 days of receiving a statement. 271 of the 400 customers respond Yes.
a. Develop a 95% confidence interval estimate for the proportion of the population of checking account customers at UCU that routinely balance their accounts in a timely manner.
b. Suppose UCU wants a 95% confidence interval estimate of the population proportion with a margin of error of E = .025. How large a sample size is needed?

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Definitions:

Maximize Profits

The goal of businesses to achieve the highest possible level of profit through revenue maximization and cost minimization.

Nondiscriminating Monopolist

A monopolist who charges all consumers the same price for its product, regardless of the quantity demanded or consumer preferences.

Marginal Cost

The investment needed to produce an extra unit of a product or service.

Profit-Maximizing

The process or strategy of adjusting the production and sale of goods or services to generate the highest possible profit.