Question

Banking fees have received much attention during the recent economic recession as banks look for ways to recover from the crisis. A sample of 37 customers paid an average fee of ​$11.54 per month on their​ interest-bearing checking accounts. Assume the population standard deviation is ​$1.67.

The 99% confidence level has a lower limit of $_____ and an upper limit of $______

Answer 1

Solution :

Given that,

Point estimate = sample mean = = 11.54

Population standard deviation = = 1.67

Sample size = n = 37

At 99% confidence level the z is ,

= 1 - 99% = 1 - 0.99 = 0.01

/ 2 = 0.01 / 2 = 0.005

Z_/2 = Z_0.005 = 2.576

Margin of error = E = Z_/2* ( /n)

= 2.576 * ( 1.67 / 37)

= 0.71

At 99% confidence interval estimate of the population mean is,

- E < < + E

11.54 - 0.71 < < 11.54 + 0.71

10.83 < < 12.25

(10.83 , 12.25 )

The 99% confidence level has a lower limit of $10.83 and an upper limit of $12.25