An increase in the rate of consumer savings is frequently tied to a lack of confidence in the economy and is said to be an indicator of a recessional tendency in the economy. A random sampling of
n = 290
savings accounts in a local community showed a mean increase in savings account values of 7.4% over the past 12 months, with a standard deviation of 5.6%. Estimate the mean percent increase in savings account values over the past 12 months for depositors in the community.
%
Find the 95% margin of error (in %) for your estimate. (Round your answer to three decimal places.)
%
Solution :
Given that,
Point estimate = sample mean = = 0.074
sample standard deviation = s = 0.056
sample size = n = 290
Degrees of freedom = df = n - 1 = 290 - 1 = 289
At 95% confidence level
= 1 - 95%
=1 - 0.95 =0.05
/2
= 0.025
t/2,df
= t0.025,289 = 1.968
Margin of error = E = t/2,df * (s /n)
= 1.968 * (0.056 / 290)
Margin of error = E = 0.006
Margin of error = E = 0.6%
Get Answers For Free
Most questions answered within 1 hours.