In 2004, a small dealership leased 21 Chevrolet Impalas on 2-year leases. When the cars were returned?

Question

In 2004, a small dealership leased 21 Chevrolet Impalas on 2-year leases. When the cars were returned

in 2006, the mileage was recorded (see below). Is the dealer’s mean significantly greater

than the national average of 30,000 miles for 2-year leased vehicles, using the 10 percent level of

significance? Mileage

40,060 24,960 14,310 17,370 44,740 44,550 20,250

33,380 24,270 41,740 58,630 35,830 25,750 28,910

25,090 43,380 23,940 43,510 53,680 31,810 36,780

Answer 1

Hi -

To find the dealer's mean, we add up all the mileage numbers and divide by the total number of cars (21).

If my math is right, the sum of all the mileage numbers is 712,940.

712,940 / 21 = about 33,949.

"Using the 10 percent level of significance" - this means that the dealer's mean has to be at least 10% above the national average to be considered "significantly greater."

10% above the natioanl average of 30,000 would be 33,000, and the dealer mean is 33,949. So YES, it is statistically significant.

Hope this helps!