Question

Anystate Auto Insurance Company took a random sample of 390 insurance claims paid out during a 1-year period. The average claim paid was $1555. Assume σ = $234.

Find a 0.90 confidence interval for the mean claim payment. (Round your answers to two decimal places.)

lower limit	$
upper limit	$

Find a 0.99 confidence interval for the mean claim payment. (Round your answers to two decimal places.)

lower limit	$
upper limit	$

Answer 1

Given that, sample size (n) = 390

sample mean = $1555 and

population standard deviation (σ) = $234

a) A 90% confidence level has significance level of 0.10 and critical value is,

The 90% confidence interval for the mean claim payment is,

Where,

Lower limit = $ 1535.51

Upper limit = $ 1574.49

b) A 99% confidence level has significance level of 0.01 and critical value is,

Where,

Lower limit = $ 1524.49

Upper limit = $ 1585.51

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