In: Statistics and Probability
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=69.2σ=69.2 dollars. You would like to be 99% confident that your estimate is within 1.5 dollar(s) of average spending on the birthday parties. How many parents do you have to sample?
Solution :
Given that,
standard deviation = = 69.2
margin of error = E = 1.5
At 99% confidence level the z is ,
= 1 - 99% = 1 - 0.99 = 0.01
/ 2 = 0.01 / 2 = 0.005
Z/2 = Z0.005 = 2.576
Sample size = n = ((Z/2 * ) / E)2
= ((2.576 * 69.2 ) / 1.5)2
= 14122.88
= 114123
Sample size = 14123