A bank wonders whether omitting the annual credit card fee for customers who charge at least $2,400 in a year would increase the amount charged on its credit card. The bank makes this offer to an SRS of 250 of its existing credit card customers. It then compares how much these customers charge this year with the amount that they charged last year. The mean increase is $342, and the standard deviation is $108.

Is there a significant evidence at the 1% level that the mean amount charged increases under the no-fee offer? State H_oand H_aand carry out a t-test.

Give a 95% confidence interval for the mean amount of the increase.

The distribution of the amount charged is skewed to the right, but outliers are prevented by the credit limit that the bank enforces on each card. Use of the t procedures is justified in this case even though the population distribution is not normal. Explain why.