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?

Answer:

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).