In a sample of 80 borrowers who borrowed less than $1,000 from an online instant lender, 20 repaid late while in a sample of 120 who borrowed over $1,000, 44 repaid late. Is there enough evidence to conclude that those who borrow less than $1,000 are less like likely to repay late? Test at=0.025.

a) Calculate the test statistic. Letp1be the proportion for borrowers who borrowed less than $1,000 andp2 be those who borrowed over $1,000.

Z=

b) Determine the critical value(s) for the hypothesis test.

c) Conclude whether to reject the null hypothesis or not based on the test statistic.

Reject

Fail to Reject

Cannot Use Normal Approximation