Question

Market research indicates that a new product has the potential to make the company an additional $1.6 million, with a standard deviation of $2.0 million. If this estimate was based on a sample of 8 customers, what would be the 95% confidence interval?

Answer 1

Confidence Interval for Population mean

Given,

Sample Size : n=8

Market research indicates that a new product has the potential to make the company an additional $1.6 million, with a standard deviation of $2.0 million

i.e Sample mean : : Average additional to the company = $1.6 million

Sample standard deviation : s = $2.0 million

Formula for Confidence Interval for Population mean when population Standard deviation is not known

Sample Mean :	1.6
Sample Standard Deviation : s	2
Sample Size : n	8
Degrees of freedom : n-1	7
Confidence Level :	95
	0.05
/2	0.025
	2.3646

95% confidence interval

95% confidence interval : (-0.072,3.272)