Question

You want to obtain a sample to estimate how much parents spend on their kids birthday parties. Based on previous study, you believe the population standard deviation is approximately σ = 63.3 dollars. You would like to be 98% confident that your estimate is within 4 dollar(s) of average spending on the birthday parties. How many parents do you have to sample?

Answer 1

Solution :

Given that,

standard deviation =   =63.3

Margin of error = E = 4

At 98% confidence level the z is ,

= 1 - 98% = 1 - 0.98 = 0.02

/ 2 = 0.02/ 2 = 0.01

Z/2 = Z0.01 = 2.326 ( Using z table    )

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

n = ( 2.326*63.3 / 4 )2

n =1354.89

Sample size = n =1355 rounded