Question

1.      A questionnaire of spending habits was given to a random sample of college students. Each student was asked to record and report the amount of money they spent on books and school supplies in a semester. The amount of money spent on books and school supplies is said to follow normal distribution. The sample of 85 students resulted in an average of $850.  

a)     What are the simple conditions necessary for the confidence interval to be valid?

b)     Find and interpret a 96% confidence interval for the mean amount of money spent by college students on books and school supplies if the population standard deviation is $140.

Answer 1

a) The simple conditions necessary for the confidence interval to be valid are

i) Samples are independent

ii) Samples are taken from normal population

iii) Sample mean is follows Normal distribution

b)