Question

Anystate Auto Insurance Company took a random sample of 380 insurance claims paid out during a 1-year period. The average claim paid was $1595. Assume σ = $232. Find a 0.90 confidence interval for the mean claim payment. (Round your answers to two decimal places.) lower limit $ Incorrect: Your answer is incorrect. upper limit $ Incorrect: Your answer is incorrect. Find a 0.99 confidence interval for the mean claim payment. (Round your answers to two decimal places.) lower limit $ Incorrect: Your answer is incorrect. upper limit $

Answer 1

We have given that,          
          
Sample mean =$1595  
Population standard deviation=$232
Sample size=380  
          
Z critical value for 90% confidence interval is (by using Z table)=1.645  
          
1) Confidence interval formula is

=(1575.42,1614.58)          
          
Lower confidence limit =$1575.42
Upper confidence limit =$1614.58

2) Z critical value for 99% confidence interval is (by using Z table)=2.58

Confidence interval formula is

=(1564.29,1625.71)  
          
          
Lower confidence limit =$1564.29
Upper confidence limit =$1625.71