Question

In a recent sample of 87 used cars sales costs, the sample mean was $6,725 with a standard deviation of $3,153. Assume the underlying distribution is approximately normal. a) Which distribution should you use for this problem? (Enter your answer in the form z or tdf where df is the degrees of freedom.) b) In words, define the random variable X. c)Construct a 95% confidence interval for the population mean cost of a used car. (i) State the confidence interval. sketch graph d) Calculate the error bound. (Round your answer to one decimal place.)

Answer 1

A)

Here we can use t- distribution.

Population standard deviation (sigma) is unknown.

B)

A random variable is defined as the value of the given variable which represents the outcome of a statistical experiment. In other words, a variable which takes up possible values whose outcomes are numerical from a random phenomenon is termed as a random variable. It is usually represented by X. There are two types of random variables, namely discrete random variable and continuous random variable.

C)

Here using ti-83 calculator.

i)

95% confident that the mean cost of a used car is lies between 6053 to 7397.