Question

A family is relocating from St. Louis, Missouri, to California. Due to an increasing inventory of houses in St. Louis, it is taking longer than before to sell a house. The wife is concerned and wants to know when it is optimal to put their house on the market. Her realtor friend informs them that the last 24 houses that sold in their neighborhood took an average time of 150 days to sell. The realtor also tells them that based on her prior experience, the population standard deviation is 65 days. [You may find it useful to reference the z table.] a. What assumption regarding the population is necessary for making an interval estimate for the population mean? Assume that the central limit theorem applies. Assume that the population has a normal distribution. b. Construct the 99% confidence interval for the mean sale time for all homes in the neighborhood. (Round intermediate calculations to at least 4 decimal places. Round "z" value to 3 decimal places and final answers to 2 decimal places.)

Answer 1

(A) Assumption regarding the population to make an interval estimate for the populaton mean is that the population has a normal distribution because when we find out the interval estimate, we always assume that the population is normally distributed.

option B is correct

Assume that the population has a normal distribution

(B) sample size n = 24

mean = 150

population standard deviation = 65

z score for 99% confidence interval is 2.576 (using z distribution table)

setting the given values

Therefore, required 99% confidence interval is (115.82,184.18)