Question

1. Private colleges and universities rely on money contributed by individuals and corporations for their operating expenses. Much of this money is invested in a fund called an endowment, and the college spends only the interest earned by the fund. A recent survey of eight private colleges in the United States revealed the following endowments (in millions of dollars): 60.2, 47.0, 235.1, 490.0, 22.6, 177.5, 95.4, and 220.0. Summary statistics yield x = 180.975 and s = 143.042. Calculate a 99% confidence interval for the mean endowment of all private colleges in the United States. Note that s is sample standard deviation. A) 180.975 ± 181.387 B) 180.975 ± 169.672 C) 180.975 ± 176.955 D) 180.975 ± 189.173

Subject is Economic Statistics

Answer 1

n= 8,  = 180.975, s = 143.042

formula for confidence interval is

Where tc is the t critical value for c=99% with df=n-1 = 8-1 = 7

using t table we get critical value as

tc = 3.499

Answer = 180.975 176.955