Question

1. A simple random sample of 50 customers is selected from an account receivable portfolio and the sample mean account balance is $1000. The population standard deviation σ is known to be $200. (8 points)

1. Construct a 95% confidence interval for the mean account balance of the

population.

2. What is the margin of error for estimating the mean account balance at the

95% confidence level?

3. Construct a 95% confidence interval for the mean account balance of the population if the sample mean account balance is obtained from a random sample of 100 instead of 50.
4. Based on the results from a. and c., what can you say about the effect of a larger sample size on the length of the confidence interval at the same confidence level?

Answer 1

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