Ryan is thinking about pawning his watch to get some quick money to pay his bills. if he gets the money from the pawnbroker, wha
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Answer:
The 99% confidence interval would be given by (12004.26;12995.74)
Explanation:
1) Previous concepts
A confidence interval is "a range of values that’s likely to include a population value with a certain degree of confidence. It is often expressed a % whereby a population means lies between an upper and lower interval".
The margin of error is the range of values below and above the sample statistic in a confidence interval.
Normal distribution, is a "probability distribution that is symmetric about the mean, showing that data near the mean are more frequent in occurrence than data far from the mean".
represent the sample mean for the sample
population mean (variable of interest)
s=700 represent the sample standard deviation
n=17 represent the sample size
2) Confidence interval
The confidence interval for the mean is given by the following formula:
(1)
In order to calculate the critical value we need to find first the degrees of freedom, given by:
Since the Confidence is 0.99 or 99%, the value of and
, and we can use excel, a calculator or a table to find the critical value. The excel command would be: "=-T.INV(0.005,16)".And we see that
Now we have everything in order to replace into formula (1):
So on this case the 99% confidence interval would be given by (12004.26;12995.74)