A credit card company wants to find out how much, on average, was charged by its card holders last month. The
company took a random sample of 100 card holders. An analyst reports that in this study, the average amount charged by card holders in the sample was $1,500 per month. She also reports that based on the information in this study, a 95% confidence interval for the average amount charged by card holders was $1,300 to $1,700 per month
a) Provide an appropriate interpretation of this confidence interval estimate. (one sentence only)
b) Provide an appropriate interpretation of confidence in the context of this estimate (one sentence only)
c) The company's marketing department has suggested using the following statements in a press release.
Classify each statement as misleading or wrong.
Carefully explain why each statement is either misleading, or wrong: one sentence per statement.
i) We are 95% confident that a randomly selected card holder will charge $1,300 - $1,700 per month.
ii) With 95% confidence, the margin of error [for the CI estimate for the average amount charged by card holders] is $400 per month.
iii) We think that 95% of the time the true average amount charged is $1,500 per month.