In a survey, 23 people were asked how much they spent on their
child's last birthday gift. The results were roughly bell-shaped
with a mean of $49 and standard deviation of $8. Find the margin of
error at a 98% confidence level.
Solution:
Given that,
n = 23
= 49
s = 8
Note that, Population standard deviation()
is unknown..So we use t distribution.
Our aim is to construct 98% confidence interval.
c = 0.98
= 1- c = 1- 0.98 = 0.02
/2
= 0.02
2
= 0.01
Also, d.f = n - 1 = 23 - 1 = 22
=
=
0.01
, 22 = 2.508
( use t table or t calculator to find this value..)
The margin of error is given by
E = /2,d.f.
* (
/
n)
= 2.508 * (8 /
23)
= 4.1836
Margin of error E = 4.1836
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