In: Statistics and Probability
Country Financial, a financial services company, uses surveys of adults age 18 and older to determine if personal financial fitness is changing over time (USA Today, April 4, 2012). In February of 2012, a sample of 1000 adults showed 410 indicating that their financial security was more than fair. In February of 2010, a sample of 900 adults showed 315 indicating that their financial security was more than fair. At 99% confidence, what is the margin of error? Round to 2 decimal places.
Solution :
Given that,
n = 900
x = 315
Point estimate = sample proportion =
= x / n = 0.35
1 -
= 0.65
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
Margin of error = E = Z
/ 2 *
((
* (1 -
)) / n)
= 2.576 * (((0.35
* 0.65) / 900)
= 0.04
The margin of error is 0.04.