Question

The population consists of the Fortune 500 Companies (Fortune website), classified by income. You are trying to find out the average income of the companies on the list. The standard deviation of the population is $ 15056.37. A random sample of 30 companies obtains a sample mean of $ 106,752.87. Provide a confidence interval of 95% and 90% for the average results.

Answer 1

(a)

With Finite Population Correction Factor (FPC):

= 0.05

From Table, critical values of Z = 1.96

Confidence Interval:

106752.87 (1.96 X 2667.83)

= 106752.87 5228.94

= (101523.93 ,111981.81)

So,

95% Confidence Interval:

101523.93 < < 111981.81

(b)

= 0.10

From Table, critical values of Z = 1.645

Confidence Interval:

106752.87 (1.645 X 2667.83)

= 106752.87 4388.58

= (102364.29 ,111141.45)

So,

90% Confidence Interval:

102364.29 < < 111141.45