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# Midland National Bank selected a sample of 40 student

ISBN: 9780077384470 64

## Solution for problem 40E Chapter 2

Basic Statistics for Business and Economics | 7th Edition

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Basic Statistics for Business and Economics | 7th Edition

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Problem 40E

Midland National Bank selected a sample of 40 student checking accounts. Below are their end-of-the-month balances.

 \$404 \$74 \$234 \$149 \$279 \$215 \$123 \$55 S 43 \$321 87 234 68 489 57 185 141 758 72 863 703 125 350 440 37 252 27 521 302 127 968 712 503 489 327 608 358 425 303 203

a. Tally the data into a frequency distribution using \$100 as a class interval and \$0 as the starting point.

b. Draw a cumulative frequency polygon.

c. The bank considers any student with an ending balance of \$400 or more a “preferred customer.” Estimate the percentage of preferred customers.

d. The bank is also considering a service charge to the lowest 10 percent of the ending balances. What would you recommend as the cutoff point between those who have to pay a service charge and those who do not?

Step-by-Step Solution:

Step 1 of 4:

(a)

We are asked to tally the data into a frequency distribution using \$100 as a class interval and \$0 as the starting point.

Midland National Bank selected a sample of 40 students checking accounts.

We have given their end-of-the-month balances.

 \$404 \$74 \$234 \$149 \$279 \$215 \$123 \$55 S 43 \$321 87 234 68 489 57 185 141 758 72 863 703 125 350 440 37 252 27 521 302 127 968 712 503 489 327 608 358 425 303 203

Frequency Distribution: A grouping of quantitative data into mutually exclusive classes showing the number of observations in each class.

 End-of-the-month balances (in dollars) Number of student accounts Cumulative Frequency 0-100 9 9 100-200 6 15 200-300 6 21 300-400 6 27 400-500 5 32 500-600 2 34 600-700 1 35 700-800 3 38 800-900 1 39 900-1000 1 40 Total 40

Step 2 of 4:

(b)

We are asked to draw a cumulative frequency polygon.

We can draw this using Minitab (Scatter plot).

Step 3 of 3

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