In: Statistics and Probability
In a survey, 10 people were asked how much they spent on their child's last birthday gift. The results were roughly bell-shaped with a mean of $38 and standard deviation of $8. Construct a confidence interval at a 98% confidence level.
= 38
s = 8/
n = 10
Degrees of freedom = df = n - 1 = 10 - 1 = 9
At 98% confidence level the t is ,
= 1 - 98% = 1 - 0.98 = 0.02
/ 2 = 0.02 / 2 = 0.01
t /2,df = t0.01,9 =2.821
Margin of error = E = t/2,df * (s /√n)
= 2.821 * (8 / √10) = 7.1
The 98% confidence interval estimate of the population mean is,
- E < < + E
38 - 7.1 < < 38 + 7.1
30.9 < < 45.1
(30.9, 45.1 )