Question

The daily revenue from the sale of fried dough at a local street vendor in Boston is known to be normally distributed with a known standard deviation of $120. The revenue on each of the last 25 days is noted, and the average is computed as $550. Construct a 95% confidence interval for the population mean of the sale of fried dough by this vendor.

Answer 1

Answer:

$502.96 to $597.04

Step-by-step explanation:

Mean sample revenue (μ) = $550

Standard deviation (σ) = $120

Sample size (n) = 25 days

The lower and upper bound for a 95% confidence interval are given by:

$U=\mu +1.960*\frac{\sigma}{\sqrt{n}}\\L=\mu -1.960*\frac{\sigma}{\sqrt{n}}$

Applying the given data:

$U=550 +1.960*\frac{120}{\sqrt{25}}\\U= \ 597.04\\L=550 -1.960*\frac{120}{\sqrt{25}}\\L= \ 502.96$

The 95% confidence interval is $502.96 to $597.04.