Question
An insurace company checks police records on 595 accidents at random and notes that teenagers were...
An insurace company checks police records on 595 accidents at random and notes that teenagers were at the wheel in 84 of them.
a) Construct the 95% confidence interval for the percentage of all auto accidents that involve teenage drivers.
b) Explain what your interval means.
c) Explain what 95% confidence means.
Homework Answers
Answer #1
Given that, n = 595 and x = 84
point estimate 
= x/n = 84/595 = 0.1412
a) a 95% confidence level has 
and critical value is,
The 95% confidence interval for p is,
Therefore, the 95% confidence interval for the percentage of all auto accidents that involve teenage drivers is, (0.1132, 0.1692)
b) From above result we can say that, the true proportion is lies between above interval.
c) We are 95% confident that, the percentage of all auto accidents that involve teenage drivers lies between 0.1132 to 0.1692
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