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Hypothesis testing

  • 26-07-2015 2:29pm
    #1
    TheSetMiner
    Registered Users, Registered Users 2 Posts: 225 ✭✭


    Car magazine says that the average cost of a used car is 2000.

    Then given a sample of 5 used cars priced at 2200, 2010, 2800, 2560, 1950, I am asked to conduct a hypothesis test at 10% significance level to see whether the cars statement can be rejected.

    My attempt:

    mean of sample: 2304
    standard dev. of sample: sqrt(sum of square differences) = 730.84
    deg of freedom: 5-1 = 4?

    so now I know I must use the t square values and I believe for 10% significance these are +- 2.132

    so 2304+- (2.132)(730.84) is my interval and since 2000 is still within this interval, it cannot be rejected?


    If anyone could verify my solution that would be great. thanks


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