Question

A major department store chain is interested in estimating the average amount its credit card customers spent on their first visit to the chain's new store in the mall. Fifteen credit card accounts were randomly sampled and analyzed with the following results: = $70.50 and s ² = 900. Construct a 90% confidence interval for the mean.

Answer 1

Solution :

degrees of freedom = n - 1 = 15 - 1 = 14

t/2,df = t_0.05,14 = 1.761

Margin of error = E = t_/2,df * (s /n)

= 1.761 * (30 / 15)

Margin of error = E = 13.64

The 90% confidence interval estimate of the population mean is,

  ± E  

= 70.50  ± 13.64

= ( $ 56.86, $ 84.14 )