Question

Calculate the minimum sample size needed to estimate the average salary earned by alumni with the following criteria: 95% confidence level, sample standard deviation of $1525, and within $125.

Answer 1

Solution

standard deviation = =$1525

Margin of error = E =$125

At 95% confidence level the z is ,

= 1 - 95% = 1 - 0.95 = 0.05

/ 2 = 0.05 / 2 = 0.025

Z/2 = Z0.025 = 1.96 ( Using z table ( see the 0.025 value in standard normal (z) table corresponding z value is 1.96 )

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

n = ( 1.96*1525 /125 )2

n =571.78

Sample size = n =572