Question

The average cost of a hotel room is said to be $170 per night. To determine if this is true, a random sample of 50 hotels is taken and resulted in a mean of $172.50 and an S of $15.40.

At 98% confidence level, the positive value of the critical value is______

(Hint use Excel T.INV function)

Answer 1

Using T.INV function in Excel gives the critical value as t-score

For, 98% confidence level, critical value (t) = 2.108721

Alternatively, we can also use z-score to find confidence interval, instead of t-score as the sample size is greater than 30.

Now, critical value table gives-

For, 98% confidence level, critical value (z) = 2.326