Question

A bank wishes to estimate the mean credit card balance owed by its customers. The population standard deviation is estimated to be $700. If a 99% confidence interval is used and a margin of error of $100 is desired, how many customers should be sampled?

Answer 1

Solution :

Given that,

standard deviation =s =   =700

Margin of error = E = 100

At 99% confidence level the z is,

= 1 - 99%

= 1 - 0.99 = 0.01

/2 = 0.005

Z/2 = 2.576

sample size = n = [Z/2* / E] 2

n = ( 2.576* 700/ 100)2

n =325.15

Sample size = n =325