You want to obtain a sample to estimate how much parents spend on their kids birthday parties. Based on previous study, you believe the population standard deviation is approximately σ = 77.2 σ = 77.2 dollars. You would like to be 90% confident that your estimate is within 5 dollar(s) of average spending on the birthday parties.
How many parents do you have to sample?
Solution :
Given that,
standard deviation = =77.2
Margin of error = E = 5
At 90% confidence level
= 1 - 90%
= 1 - 0.90 =0.10
/2
= 0.05
Z/2
= Z0.05 = 1.645
sample size = n = [Z/2* / E] 2
n = ( 1.645 *77.2 /5 )2
n =645.099
Sample size = n =645
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