Question

A bank wants to estimate the average credit card balance that its customers owe. The standard...

A bank wants to estimate the average credit card balance that its customers owe. The standard deviation of the population is estimated at $ 300. If a 98% confidence interval is used and a $ 75 interval is desired, how many should be sampled?

a.87

b.212

c.629

d.44
Math   Statistics-And-Probability   
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Answer #1

Solution :

Given that,

standard deviation = =$300

Margin of error = E = $75

At 98% confidence level the z is ,

= 1 - 98% = 1 - 0.98 = 0.02

/ 2 = 0.02 / 2 = 0.01

Z/2 = Z0.01 = 2.326

sample size = n = [Z/2* / E] 2

n = ( 2.326* 300 /75 )2

n =86.56 (rounded)

Sample size = n =87

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