Question

Banking fees have received much attention during the recent economic recession as banks look for ways to recover from the crisis. A sample of

31

customers paid an average fee of

​$11.61

per month on their​ interest-bearing checking accounts. Assume the population standard deviation is

​$1.64

.

Complete parts a and b below.

a. Construct a

95

​%

confidence interval to estimate the average fee for the population.

The

95

​%

confidence interval has a lower limit of

​$nothing

and an upper limit of

​$nothing

.

​(Round to the nearest cent as​ needed.)

b. What is the margin of error for this​ interval?

​$nothing

​(Round to the nearest cent as​ needed.)

Answer 1

Solution :

Given that,

Z/2 = Z_0.025 = 1.96

Margin of error = E = Z/2 * ( /n)

= 1.96 * ( 1.64 /  31 )

= 0.58

At 95% confidence interval estimate of the population mean is,

  ± E   

= 11.61 ± 0.58

= ( $ 11.03, $ 12.19 )

lower limit = $11.03

upper limit = $12.19

Margin of error = E = Z/2 * ( /n)

= 1.96 * ( 1.64 /  31 )

= $ 0.58