In: Statistics and Probability
An ethanol railroad tariff is a fee charged for shipments of ethanol on public railroads. An agricultural association publishes tariff rates for railroad-car shipments of ethanol. Assuming that the standard deviation of such tariff rates is $1000, determine the probability that the mean tariff rate of 450 randomly selected railroad-car shipments of ethanol will be within $120 of the mean tariff rate of all railroad-car shipments of ethanol. Interpret your answer in terms of sampling error.
Since the margin of error is 120 and the standard deviation is 1000 Now by nargin of error formula
Z= 2.5456
Using Z table The Probability is calculated that what will be the probability for Margin of error to be in 120 of the mean as
= 0.9896