Question

Eunice Gunterwal is a frugal undergraduate at State U. who is interested in purchasing a used car. She randomly selected a sample of 12 want ads in the city where she lives and found that the car prices (in $) were: 3250, 3500, 3100, 3750, 2975, 3800, 2950, 3600, 3550, 4000, 4250, 4800. Determine the 95% confidence interval for the mean price (µ) of used cars in the city.

Answer 1

C=  95% , n= 12

Calculate sample mean and sample standard deviation

We get,

= 3627.083,

S = 545.5875,

Formula for confidence interval is

Where tc is the t critical value for C= 0.95

with df = n-1 = 12 - 1 = 11

we get t critical value as

tc = 2.201

3280.43 < < 3973.74

Thus we get confidence interval as (3280.43 ,  3973.74)

Therefore we are 95% confident that the true mean price (µ) of used cars in the city. lies between  3280.43 to 3973.74.