STATS – A bank wonders whether omitting the annual credit card fee for customers

| August 30, 2017

Question
A bank wonders whether omitting the annual credit card fee for customers who charge at least $4000 per year would increase the amount charged on its credit card. The bank makes this offer to an SRS of 300 of its existing credit card customers. It then compares how much these customers charge this year with the amount charged last year. The mean increase is $385 and the standard deviation is $128. Is there significant evidence at the 1% level that the mean amount charged increases under the no fee offer? State the Ho and Ha and carry out a t test.

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