Question

Annual starting salaries for college graduates with degrees in business administration are generally expected to be between $10,000 and $35,000. Assume that a 95% confidence interval estimate of the population mean annual starting salary is desired. Given the information in the Microsoft Excel Online file below, construct a spreadsheet to determine how large a sample should be taken for each desired margin of error.

Annual starting salaries for college graduates with degrees in business administration are generally expected to be between $10,000 and $35,000.
Assume that a 95% confidence interval estimate of the population mean annual starting salary is desired.
How large a sample should be taken for each desired margin of error below?
Starting Salary			Desired margin of error
Lower	10000		400
Upper	35000
			250
			100

1. For a margin of error of ± $400 , the required sample size is n =

2. For a margin of error of ± $250 , the required sample size is n =

3. For a margin of error of ± $100 , the required sample size is n =

4. Would you recommend trying to obtain the $100 margin of error? Explain.

Answer 1

estimated standard deviation =range/4 =(35000-10000)/4=6250

a)

for95% CI crtiical Z          =

1.96

	margin of error E =	400
required sample size n=(zσ/E)2                  =		938

b)

required sample size n=(zσ/E)2                  =

2401

c)

required sample size n=(zσ/E)2                  =

15006

d)since 15006 sample size is very high and will cost a lot ,  $100 margin of error is not recommended