Question

An economist is interested in determining the sample size needed to determine the population mean daily rental cost for compact automobiles in the United States, with a margin of error of $2 and a 99% level of confidence. With the knowledge that s = 9.651, determine the sample size needed. Choose the best answer. Group of answer choices 90 89 154 155

Answer 1

Solution :

Given that,

standard deviation =s =   =9.651

Margin of error = E = 2

At 99% confidence level the z is,

= 1 - 99%

= 1 - 0.99 = 0.01

/2 = 0.005

Z/2 = 2.58

sample size = n = [Z/2* / E] 2

n = ( 2.58*9.651 /2 )2

n =154.99

Sample size = n =155