Question

In preparation for an earnings report, a large retailer wants to estimate p= the proportion of annual sales

Answer 1

Using the z-distribution, it is found that the 95% confidence interval for the proportion of sales that occured in December is (0.1648, 0.2948).

What is a confidence interval of proportions?

A confidence interval of proportions is given by:

$\pi \pm z\sqrt{\frac{\pi(1-\pi)}{n}}$

In which:

• $\pi$ is the sample proportion.

• z is the critical value.

• n is the sample size.

In this problem, we have a 95% confidence level, hence$\alpha = 0.95$, z is the value of Z that has a p-value of $\frac{1+0.95}{2} = 0.975$, so the critical value is z = 1.96.

The sample size and the estimate are given by:

$n = 161, \pi = \frac{37}{161} = 0.2298$

Hence:

$\pi - z\sqrt{\frac{\pi(1-\pi)}{n}} = 0.2298 - 1.96\sqrt{\frac{0.2298(0.7702)}{161}} = 0.1648$

$\pi + z\sqrt{\frac{\pi(1-\pi)}{n}} = 0.2298 + 1.96\sqrt{\frac{0.2298(0.7702)}{161}} = 0.2948$

The 95% confidence interval for the proportion of sales that occured in December is (0.1648, 0.2948).

More can be learned about the z-distribution at brainly.com/question/25890103