Question

Anystate Auto Insurance Company took a random sample of 356 insurance claims paid out during a 1-year period. The average claim paid was $1565. Assume σ = $262.

Find a 0.90 confidence interval for the mean claim payment. (Round your answers to two decimal places.)

lower limit	$
upper limit	$

Find a 0.99 confidence interval for the mean claim payment. (Round your answers to two decimal places.)

lower limit	$
upper limit	$

Answer 1

n = 356

= $1565

= $262

Confidence interval, CI = Z*

a) For 0.90 confidence interval, Z* = 1.645

CI = 1565 1.645 x

= 1565 22.84

Lower limit = $1542.16

Upper limit = $1587.84

a) For 0.99 confidence interval, Z* = 2.576

CI = 1565 2.576 x

= 1565 35.77

Lower limit = $1529.23

Upper limit = $1600.77