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Studentka2010 [4]
3 years ago
10

Vitamin D, whether ingested as a dietary supplement or produced naturally when sunlight falls on the skin, is essential for stro

ng healthy bones. The bone disease rickets was largely eliminated in England during the 1950s, but now there is concern that a generation of children more likely to watch TV or play computer games than spend time outdoors is at increased risk. A recent study of 2700 children randomly selected from all parts of England found 20% of them deficient in Vitamin D.A. Find a 98% confidence interval for the true percentage of English children that are vitamin D deficient.B. Explain what your interval means in context.C. Explain what "98% confidence" means in this context.D. Do these data refute a pundit's claim that 25% of English children are vitamin D deficient?
Mathematics
1 answer:
tigry1 [53]3 years ago
3 0

Answer:

a) The 98% confidence interval would be given (0.182;0.218).

b) We are 98% confident that the true proportion of of England people who are deficient in Vitamin D is between 0.182 and 0.218.

c) If repeated samples were taken and the 98% confidence interval computed for each sample, 98% of the intervals would contain the population proportion.

d) Yes since the confidence interval not contains the value 0.25, we can refute the claim at 2% of significance.

Step-by-step explanation:

Data given and notation  

n=2700 represent the random sample taken    

X represent the people in England who are deficient in Vitamin D

\hat p=0.2 estimated proportion of England people who are deficient in Vitamin D

\alpha=0.02 represent the significance level

Confidence =0.98 or 98%

z would represent the statistic (variable of interest)    

p= population proportion of England people who are deficient in Vitamin D

Part a

The confidence interval would be given by this formula

\hat p \pm z_{\alpha/2} \sqrt{\frac{\hat p(1-\hat p)}{n}}

For the 98% confidence interval the value of \alpha=1-0.98=0.02 and \alpha/2=0.01, with that value we can find the quantile required for the interval in the normal standard distribution.

z_{\alpha/2}=2.33

And replacing into the confidence interval formula we got:

0.20 - 2.33 \sqrt{\frac{0.2(1-0.2)}{2700}}=0.182

0.20 + 2.33 \sqrt{\frac{0.2(1-0.2)}{2700}}=0.218

And the 98% confidence interval would be given (0.182;0.218).

Part b

We are 98% confident that the true proportion of of England people who are deficient in Vitamin D is between 0.182 and 0.218.

Part c

If repeated samples were taken and the 98% confidence interval computed for each sample, 98% of the intervals would contain the population proportion.

Part d

Yes since the confidence interval not contains the value 0.25, we can refute the claim at 2% of significance.

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avanturin [10]

The time value of money calculation can be performed using formula equations or online calculators.

The correct responses are;

  • 1) Option 3
  • 2) Option 2
  • 3) The difference in principal is approximately $8,000
  • The difference in interest earned is approximately $2,977.87
  • 4) It is better to invest more money at the beginning of the 30 years

Reasons:

Option 1: Present value = 0

Amount invested per month, A = $25/month

The Annual Percentage Rate, APR, r = 3.25%

Number of years = 30

The future value of an annuity is given by the formula;

\displaystyle FV_{A} = \mathbf{A \cdot \left (\frac{ \left(1 + \frac{r}{m} \right)^{m\cdot t} - 1}{\frac{r}{m} } \right)}

In option 1, m = 12 periods per year

Therefore;

\displaystyle FV_{A} = 25 \times \left (\frac{ \left(1 + \frac{0.0325}{12} \right)^{12 \times 30} - 1}{\frac{0.0325}{12} } \right) \approx  \mathbf{15,209.3}

Contribution = $25 × 12 × 30 = $9,000

Total interest earned = $15,209.3 - $9,000 = $6,209.3

Final balance = $15,209.3

Option 2: Present value = 0

Amount, A = $75/quarter

m = 4 periods per year

The Annual Percentage Rate, APR = 4.00%

Therefore;

The effective interest rate is therefore;

\displaystyle r_{eff} = \left(1 + \frac{0.04}{4} \right)^4 - 1 \approx \mathbf{0.04060401}

\displaystyle FV_{A} = 75 \times \left (\frac{ \left(1 + \frac{0.04060401}{4} \right)^{4 \times 30} - 1}{\frac{0.04060401}{4} } \right) \approx  17,437.7

Using an online calculator, FV = $17,467.04

Contribution = $75 × 4 × 30 = $9,000

Total interest earned = $17,467.04 - $9,000 = $8,467.04

Final balance = $17,467.04

Option 3: Present value = $1,000

APR = 6.25%

m = 12 period per year

Number of years, t = 30 years

Therefore;

\displaystyle FV = \left (1 + \frac{0.0625}{12} \right)^{12 \times 30} \approx \mathbf{6,489.17}

Contribution = $1,000

Total interest earned = $6,489.17 - $1,000 = $5,489.17

Final balance = $6,489.17

The table of values is therefore;

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1) The option that has the least amount invested are <u>option 3</u>

Option 3 investment plan is a present value of $1,000, invested for 30 years at 6.25% APR compounded monthly.

2) <u>Option 2</u> yielded the highest amount at the end of 30 years, given that the APR is higher than the APR for option 1, although the amount invested over the period are the same.

The basis of option 2 investment plan is $75 invested quarterly at 4.00% APR compounded monthly for 30 years.

3) The difference in the principal invested for the highest and lowest final balance is $9,000 - $1,000 = <u>$8,000</u>

The difference in the interest earned is; $8,467.04 - $5,489.17 = <u>$2,977.87</u>

4) In option 1 the present value is zero, therefore zero amount was invested at the beginning.

The interest to investment ration is 6,209.3:9,000 ≈ 0.7:1

In option 3, all the money was invested at the beginning.

The interest to investment ratio of option 3 is; 5,489.17:1,000 ≈ 5.5:1

Given that the interest to investment ratio, which is the return on investment is larger when more money is saved at the beginning as in option 3, <u>it is better to invest more money at the beginning</u>.

Learn more about future value of an annuity here:

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