Question
In: Statistics and Probability
An online used car company sells second-hand cars. For 40 randomly selected transactions, the mean price...
An online used car company sells second-hand cars. For 40 randomly selected transactions, the mean price is 2600 dollars.
Assuming a population standard deviation transaction prices of 250 dollars, obtain a 99% confidence interval for the mean price of all transactions. Please carry at least three decimal places in intermediate steps. Give your final answer to the nearest two decimal places.
is this the answer? (2498.18, 2701.82)
Solutions
Expert Solution
Solution :
Given that,
Point estimate = sample mean = 
= 2600
Population standard deviation = 
= 250
Sample size = n = 40
At 99% confidence level
= 1 - 99%
= 1 - 0.99 =0.01
/2
= 0.005
Z/2
= Z0.005 = 2.576
Margin of error = E = Z/2
* ( 
/
= 2.576 * ( 250 /
= 101.825
At 99% confidence interval estimate of the population mean is,
- E < 
<
+ E
2600 - 101.825 < < 2600 + 101.825
2498.175 <
< 2701.825
( 2498.18 , 2701.82 )
At 99% confidence interval is ( 2498.18 , 2701.82 )
orchestra answered 2 years agoRelated Solutions
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