Question

You want to obtain a sample to estimate how much parents spend on their kids birthday parties. Based on previous study, you believe the population standard deviation is approximately σ=47.4σ=47.4 dollars. You would like to be 98% confident that your estimate is within 5 dollar(s) of average spending on the birthday parties. How many parents do you have to sample? n=______

Answer 1

Solution :

Given that,

standard deviation = =47.4

Margin of error = E = 5

At 98% confidence level the z is ,

= 1 - 98% = 1 - 0.98 = 0.02

/ 2 = 0.02/ 2 = 0.01

Z/2 = Z0.01 = 2.326 ( Using z table    )

sample size = n = [Z/2* / E] 2

n = ( 2.326* 47.4 / 5 )2

n =486.2

n=486 rounded