Question

In preparing its budget for next year, Chartwell's would like to estimate the amount of unused flex dollars that remain on student accounts at the end of the year. A random sample of 7 students indicates the following amounts: $23, $18, $0, $31, $15, $9, $4. Determine a 98% confidence interval for the average amount of unused flex dollars.

Answer 1

Hence the confidence interval for x̄ is given by,

Coming back to our problem,

Given that Chartwell's would like to estimate the amount of unused flex dollars that remain on student accounts at the end of the year. So a random sample of 7 students indicates the following amounts: $23, $18, $0, $31, $15, $9, $4. Here we need to find a 98% confidence interval for the average amount of unused flex dollars.

Here clearly n=7.

The table of calculations is provided below,

No.	Unused Flex in $ (xi)	(xi-x̄)^2
1	23	75.939
2	18	13.796
3	0	204.0812
4	31	279.3678
5	15	0.5102
6	9	27.9386
7	4	105.7956
Total	100	707.4284

Lower Limit

Upper Limit