You are trying to estimate the average amount a family spends on food during a year....

You are trying to estimate the average amount a family spends on food during a year. In the past the standard deviation of the amount a family has spent on food during a year has been approximately $1000. If you want to be 99% sure that you have estimated average family food expenditures within (error) $50, how many families do you need to survey? Round your answer to a whole number

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Expert Solution

Standard Deviation ,   σ =    1000
sampling error ,    E =   50
Confidence Level ,   CL=   99%

alpha =   1-CL =   1%
Z value =    Zα/2 =    2.576   [excel formula =normsinv(α/2)]

Sample Size,n = (Z * σ / E )² = (   2.576   *   1000   /   50   ) ² =   2653.959


So,Sample Size needed=       2654

Thanks in advance!

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orchestra answered 1 year ago

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