Question

1. The average price of a gallon of unleaded regular gasoline was reported to be $3.44 in northern Kentucky. Use this price as the population mean, and assume the population standard deviation is $0.30.
   1. What is the probability that the mean price for a sample of 50 service stations is within ±$.06 of the population mean?
   2. What is the probability that the mean price for a sample of 100 service stations is within ±$.06 of the population mean?

2. The Wall Street Journal reported that automobile crashes cost the United States $162 billion annually. The average cost per person for crashes in the Tampa, Florida, area was reported to be $1900. Suppose this average cost was based on a sample of 50 persons who had been involved in car crashes and that the population standard deviation is known to be $500. What is the 90% confidence interval of the average cost per person for crashes in Tampa? What would you recommend if the study required a margin of error of $150 or less?

PLEASE DO THIS IN EXCEL AND SHOW FORMULA!

Answer 1

I have solved each one of them. Please see the attached screenshots of my excel file. The column with heading "Formula" shows you what formula has been built in the cell containing calculation.

Your respective answers are:

Part (a): 84.27%

Part (b): 95.45%

Part (c): Lower limit of confidence level:  1,783.69 ; Upper limit of confidence level:  2,016.31
; decrease n; the sample size should be higher than 30.06 - the revised value of n

Solution to part (a):

Solution to part (b)

Solution to part (c)