Question

A utlility company sampled 443 customers, and finds that 132 of them had a discrpancy on their service bill. What is the upper bound for the 99% confidence interval for the proportion of customers with a discrepancy on their service bill?

Round to three decimal places (for example : 0.419 ). Write only a number as your answer.

Answer 1

Here the population parameter is the proportion of all customers with a discrepancy on their service bill.

So, here we have sample size = n= 443, sample proportion = = 132/443. Also, alpha = (1-0.99) = 0.01.

Using the probability table for Standard Normal Distribution, we find tau(alpha/2) = 2.575829 when alpha = 0.01

Thus, the upper bound for the 99% confidence interval for the proportion of customers with a discrepancy on their service bill is given by = 0.354 (Rounded to three decimal places).