Question

1. [4 marks] The mean monthly rent paid by UVic students is normally distributed. A pilot study of 25 students was performed by UVSSA to investigate the mean monthly rent. The study costed $150.00 and sampled 25 subjects. Its results indicated that the bound of error of estimation was $30 with a 90% confidence. Assuming that the cost is proportional to the number of students, how much is a full study going to cost to determine the mean monthly rent of UVic students to within $10 with 95% confidence?

Answer 1

Answer:

Given data

New margin of error = $ 30

Old margin of error = $ 10

Old cost = $150

here since number of students are inversely proportional to square of margin of error.

So cost to determine the mean monthly rent of UVic students to within $10 =old cost (New margin of error/old margin of error)^2

cost to determine the mean monthly rent of UVic students to within $10 = 150(30/10)^2

cost to determine the mean monthly rent of UVic students to within $10 = 150(3)^2

cost to determine the mean monthly rent of UVic students to within $10 = 150*9

cost to determine the mean monthly rent of UVic students to within $10 = $ 1350

Hence cost to determine the mean monthly rent of UVic students to within $10 with 95% confidence is $1350