Question

A random sample of 10 parking meters in a resort community showed the following incomes for a day. Assume the incomes are normally distributed. (a) Find the 95% confidence interval for the true mean and interpret the result. Round to the nearest cent. (b) Find margin of error. $3.60 $4.50 $2.80 $6.30 $2.60 $5.20 $6.75 $4.25 $8.00 $3.00

Answer 1

Answer:

A 95% confidence interval for the true mean is [$3.39, $6.01].

Step-by-step explanation:

We are given that a random sample of 10 parking meters in a resort community showed the following incomes for a day;

Incomes (X): $3.60, $4.50, $2.80, $6.30, $2.60, $5.20, $6.75, $4.25, $8.00, $3.00.

Firstly, the pivotal quantity for finding the confidence interval for the population mean is given by;

                         P.Q.  =  $\frac{\bar X-\mu}{\frac{s}{\sqrt{n} } }$  ~ $t_n_-_1$

where, $\bar X$ = sample mean income = $\frac{\sum X}{n}$ = $4.70

            s = sample standard deviation = $\sqrt{\frac{\sum (X-\bar X)^{2} }{n-1} }$  = $1.83

            n = sample of parking meters = 10

            $\mu$ = population mean

Here for constructing a 95% confidence interval we have used a One-sample t-test statistics because we don't know about population standard deviation.

So, 95% confidence interval for the population mean, $\mu$ is ;

P(-2.262 < $t_9$ < 2.262) = 0.95  {As the critical value of t at 9 degrees of

                                            freedom are -2.262 & 2.262 with P = 2.5%}  

P(-2.262 < $\frac{\bar X-\mu}{\frac{s}{\sqrt{n} } }$ < 2.262) = 0.95

P( $-2.262 \times {\frac{s}{\sqrt{n} } }$ < ${\bar X-\mu$ < $2.262 \times {\frac{s}{\sqrt{n} } }$ ) = 0.95

P( $\bar X-2.262 \times {\frac{s}{\sqrt{n} } }$ < $\mu$ < $\bar X+2.262 \times {\frac{s}{\sqrt{n} } }$ ) = 0.95

95% confidence interval for $\mu$ = [ $\bar X-2.262 \times {\frac{s}{\sqrt{n} } }$ , $\bar X+2.262 \times {\frac{s}{\sqrt{n} } }$ ]

                                         = [ $4.70-2.262 \times {\frac{1.83}{\sqrt{10} } }$ , $4.70+ 2.262 \times {\frac{1.83}{\sqrt{10} } }$ ]

                                         = [$3.39, $6.01]

Therefore, a 95% confidence interval for the true mean is [$3.39, $6.01].

The interpretation of the above result is that we are 95% confident that the true mean will lie between incomes of $3.39 and $6.01.

Also, the margin of error  =  $2.262 \times {\frac{s}{\sqrt{n} } }$

                                          =  $2.262 \times {\frac{1.83}{\sqrt{10} } }$  = 1.31