In: Statistics and Probability
A global insurance company plans to offer life insurance policies in a developing country. It needs to estimate how many years, on average, residents of this country will live by reviewing death records of deceased individuals at a local government office. What (minimum) sample size is needed to form a 97% confidence interval to estimate the true average lifespan of residents in this country to within ±1.5 years? Assume the population standard deviation is known to be 10 years.
Do not round intermediate calculations. Round up your final answer to the next whole number.
Sample size =
death records
Solution
standard deviation = =10
Margin of error = E = +/ -1.5
At 97% confidence level the z is ,
= 1 - 97% = 1 - 0.97 = 0.03
/ 2 = 0.03 / 2 = 0.015
Z/2 = Z0.015 = 2.17
sample size = n = [Z/2* / E] 2
n = ( 2.17* 10/1.5 )2
n =209.28
Sample size = n =210