Exhibit 10-6
The management of a department store is interested in estimating the difference between the mean credit purchases of customers using the store's credit card versus those customers using a national major credit card. You are given the following information.
-Refer to Exhibit 10-6. A 95% confidence interval estimate for the difference between the average purchases of the customers using the two different credit cards is
A)49 to 64
B)11.68 to 18.32
C)125 to 140
D)8 to 10

Question

Exhibit 10-6
The management of a department store is interested in estimating the difference between the mean credit purchases of customers using the store's credit card versus those customers using a national major credit card. You are given the following information. 
-Refer to Exhibit 10-6. A 95% confidence interval estimate for the difference between the average purchases of the customers using the two different credit cards is
A)49 to 64 
B)11.68 to 18.32 
C)125 to 140 
D)8 to 10

Quizplus · Accepted Answer

Based on the information provided in Exhibit 10-6, the point estimate for the difference in mean credit purchases is $15 (calculated as $140 - $125). The standard error of the difference is $1.66. Using a 95% confidence level and a t-distribution with 28 degrees of freedom (based on a pooled estimate of the variances of the two groups), the margin of error is $3.32. Therefore, the 95% confidence interval estimate for the difference in mean credit purchases is $15 +/- $3.32, or $11.68 to $18.32. Thus, the correct answer is B.

Exhibit 10-6 The Management of a Department Store Is Interested in Estimating